About The Author

mortgage broker damian youell

See some of Damian’s client reviews below

Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.

Introduction

Divorce and separation are challenging times, emotionally and financially. One of the largest assets couples generally share is their home. The decision-making process for what happens to the marital property can be complex. Mortgage buyouts are a common option and, in many cases, a pragmatic solution for both parties. This article aims to shed light on the intricate details of buying out a spouse in a mortgage deal and how it affects your financial circumstances.

Damian Youell

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How We Work

1: We contact you and take down your details, income outgoings, name, address etc.

2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.

3: You upload the documents and information needed via our channel our online portal.

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Assessing Your Financial Standing

Credit Score

Before initiating any process, you need to evaluate your credit score. Most mortgage lenders would conduct a credit check before they offer you any mortgage terms. A low credit score, often tagged as bad credit, could limit your options for a mortgage after divorce.

Annual Income and Affordability Checks

The next step is to assess your annual income and go through affordability checks. This will usually require bank statements and proof of income. An affordability assessment helps the mortgage lender determine the likelihood of you keeping up with regular mortgage payments post-divorce.

Mortgage Capacity Assessment Report

Some experts recommend getting a mortgage capacity assessment report. This will give you an accurate estimate, as opposed to a rough estimate, of how much you can borrow.

Legal Considerations

Legal Advice

It’s prudent to seek legal advice at this difficult time, especially when dealing with the transfer of equity mortgages and the legal process involved in a divorce settlement. This may include how to divide marital assets and the fair split of ownership percentage in the property.

Equity release will reduce the value of your estate and can affect your eligibility for means-tested benefits

Transfer of Equity

A transfer of equity is often involved in a mortgage buyout. This essentially means changing the ownership rights of the property. A formal valuation by a professional valuer will ensure you get the correct price, or fair market value, for your share of the property.

Types of Mortgages for Buyout

Mortgage Applications and Deals

Talk to a mortgage broker or mortgage adviser about your options. They may suggest a variety of mortgages for people in your situation, such as guarantor mortgages, buy-to-let mortgages, or charge mortgages. Each will come with its own set of repayment charges and terms. Some even specialise in mortgages after separation or divorce.

Remortgage

Another option is to remortgage the property for life. A remortgage can be a good option if you meet the affordability criteria and the house buyout makes the remortgage viable.

Negative Equity

If you’re dealing with negative equity, then the process can get complicated. In such a case, expert advice from a specialist in remortgages or an independent mortgage broker is invaluable.

Costs Involved

Fees and Additional Costs

Consider the closing costs and any additional solicitor’s costs. Mortgage broker fees can also add up. It’s essential to factor these costs into the purchase price.

Fair Split and Cash Payment

Determine a fair split of the property value, considering also whether a cash payment is feasible. If you have sufficient income or cash savings, a cash offer may be an attractive option for the buying spouse.

Finalising the Buyout

Final Steps

Once the fair market value has been determined and you have complete confidence in your financial capabilities, it’s time to finalise the buyout. This will involve a fair bit of paperwork, and it’s crucial to put every arrangement in writing.

Conclusion

Navigating through a mortgage to buy out a spouse can be a complex process that requires careful thought and planning. Whether you’re a married couple, in a civil partnership, or even an unmarried couple looking to disentangle your finances, there are a couple of challenges you’ll face. Take time to consult with financial advisers, divorce lawyers, or family law attorneys, and consider all your alternative options. Buying out your spouse is not just about securing a loan or transferring a mortgage balance; it’s about securing your financial future.

Remember, each case will be dependent on individual circumstances, including marital splits, ownership rights, and financial services available. Hence, a tailored approach based on expert mortgage advice will go a long way in helping you achieve a cleaner split, both emotionally and financially.