If you and your spouse or partner own a property with a joint mortgage, one of you will usually be released from this if you separate. We explain the legal process and answer the question, What happens if you have a joint mortgage and split up?
Dealing with a divorce, house and splitting a mortgage is not always straightforward. You will usually need a solicitor to handle the legal aspects of the transaction to ensure that your interests are protected.
What is a joint mortgage?
A joint mortgage is a mortgage in the names of two or more people, with the property also held in those names. You will both own the property and be responsible for the loan. Ownership could be as joint tenants, in which case neither of you has a defined share of the property, but you both own the whole of it together or as tenants in common, with each of you owning a specified share. For example, one of you might own one-quarter and the other one three-quarters.
If you have a joint mortgage, you are both liable for meeting the repayments. If payments are missed, your mortgage lender can take legal action against either or both of you to recover the money owed. This is the case even for a joint mortgage paid by one person.
How to get out of a joint mortgage
If you no longer want to be a party to a joint mortgage, you will first need to agree with your former partner on how you want to handle matters.
You could sell the property and split the proceeds. Alternatively, if you no longer want to be an owner but your partner does, they could ask the mortgage lender if the lender would be prepared to change the mortgage so that they are the only one on the mortgage.
What happens if one person wants to leave a joint mortgage?
If one person wishes to remain on the mortgage but the other wants to leave, the person who wants to remain will need to ask the lender whether they are prepared to release the other person.
Can a joint mortgage be transferred to one person?
The lender will have strict criteria when deciding whether to transfer a joint mortgage to one person. They will assess that person’s ability to pay the mortgage on their own and will not agree if the individual does not have sufficient income or a good enough credit score. If they agree, both the mortgage and the property will be transferred to one party.
Other options may be available. For example, it may be possible to remortgage with another lender, lengthen the mortgage term so that the payments are lower or switch to an interest-only mortgage if the borrower will be able to pay off the capital at a later date.
For information on our related services, see our property solicitors in London page.
Can I walk away from a joint mortgage?
You cannot walk away from a joint mortgage. As long as your name remains on the mortgage, you will be liable for the mortgage payments, even if you are no longer living at the property.
If the payments are not made, the lender could repossess the property. It will then be sold and they will deduct their expenses from the sale proceeds, as well as the outstanding mortgage debt, interest on the late payments and penalties.
When a property is repossessed, it will negatively affect your credit score and you may find it hard to obtain a mortgage in the future.
For information on our related services, see our property disputes solicitors in London page.
Can you keep a joint mortgage after divorce?
If you have a joint mortgage but separated from your spouse or you have divorced, you could face difficulties if your former partner stopped making the payments for any reason.
You would also find it hard to get a mortgage after divorce if you want to buy a property yourself, but you already have a mortgage. In addition, any property purchase would be classed as buying a second home, so you would be required to pay an additional Stamp Duty charge.
It is usually the case that when a couple divorce or separate, the person leaving the shared home will come off of the mortgage in some way. This could be by a transfer and remortgage or by selling the property.
There are a number of ways to deal with a shared property and joint mortgage on separation and you are advised to speak to a solicitor to ensure that you choose the best option for your circumstances.
Occasionally, it may be necessary to keep a property and mortgage in joint names. For example, if you have children who need a home and the parent who will have the main care of them is not able to take on the mortgage on their own, the property could remain in joint names until the children are older. The property can be sold or the other parent has a higher income and can take over the mortgage.
If you have a joint mortgage, split up and are not married, then you can consider selling the property if your former partner is not able to take on the mortgage on their own unless the property is needed for children.
For information on our services, see our family law solicitors in London page.
What happens if you are married but not on mortgage?
If you are not on the mortgage and separate from your spouse, you should speak to a solicitor. You will have matrimonial home rights, which is the right to occupy the property, and these can be officially registered at HM Land Registry.
As a spouse, you will also have a right to a share of the matrimonial assets, which could include the property or a share of the sale proceeds.
If you are not married and not on the mortgage, you may be able to make a claim under the Trusts of Land and Appointment of Trustees Act 1996 or TOLATA.
For information on our related services, see our divorce solicitors in London page.
How can we help?
We specialise in both family law and property matters, meaning we can provide expert advice on dealing with a joint mortgage, separation and divorce. We hold the Law Society’s Conveyancing Quality Scheme accreditation for our property expertise and high service levels.
If you are considering splitting up from your partner or spouse and you currently have a joint mortgage or are sharing a property, we can provide you with the guidance and representation you need.
Dealing with divorce and mortgage issues is not always straightforward, and you and your partner may have different opinions about how you want to handle matters. We can discuss your options with you and work to secure the best possible outcome on your behalf, whether you are splitting your house in divorce, remortgaging, or selling and splitting the sale proceeds.
Where necessary, we can deal with a transfer of the property and remortgage on your behalf.
Contact our family solicitors
To speak to one of our family law solicitors about joint mortgage and separation you can call us on 020 7553 9000, send an email to info@roselegal.co.uk, or use our contact form to request a call-back.