Mortgages and divorce

Nowadays, four out of ten married couples divorce. This is one of the most difficult and stressful situations a couple may face, particularly if they have children.

However difficult things may be, one of the most important priorities should be to ensure that mortgage repayments are maintained. Otherwise, this could lead to further financial problems in the future.

Contact your mortgage lender: Remember that many others have been through the same thing, and lenders will be sympathetic as long as they are kept informed of events.

Generally, a married couple would own a property as joint tenants where both partners jointly own the property as a whole. This option is also probably most suitable for an unmarried or same sex couple. In the event of death of one party, the property would automatically pass to the other person and if the couple were to separate, either owner may insist on the sale of the property unless the other party can raise funds to buy the other's share.

If this were to happen, a solicitor would need to give a valuation of your property. The buyer would then pay their former partner half the value of the deposit, plus half the increase in the value of the house. The remaining partner would then cover the mortgage on his or her own.

The other option for joint property ownership (increasingly common among friends or relatives) is to hold the property as tenants-in-common. Each owner has a separate share in the property. There can be more than two owners and the shares do not have to be equal but can reflect the level of contribution to the purchase made by each person.

If one of the purchasers were to die, their share of the property would not automatically pass to the surviving owners but their share of the property would form part of their estate. Again however, in the event of separation, one owner is entitled to insist on the sale of the property if they wish to realise their share of it unless buyout is an option.

Always seek legal advice in these circumstances - and you'll probably need a mortgage broker if you want maintenance payments to be taken into account for your home loan.