'Divorce mortgage' could be introduced by end of 2016

May 25, 2016 by Brendan

Home owners

Older people who divorce during later years may soon be given the help they require to remain in their marital home.

According to a study conducted by Nationwide, the age group with the most divorces is now those aged over 50, and 28% of people divorcing are forced to sell their home. Lenders are taking part in talks to decide whether it is possible to introduce a “divorce mortgage.” The mortgage would make it possible for a divorcee to remain in their home, even when they don’t have sufficient funds to do so.

The mortgage would work by lending a person sufficient money for a set period of time, to buy out their partner. This would mean that one of the couple could stay in the home rather than having to sell, which is particularly beneficial where children are involved. Although the mortgage isn’t yet in existence, brokers say that it is possible that it will be introduced by the end of the year.

According to one broker, Simon Collins, this area is underserved and requires an innovative approach to prevent divorcing couples from having to sell their home. The ‘divorce mortgage’ would be available for a set period, and then the borrower could either choose to sell the property, or take on a mortgage to repay the loan if their circumstances changed. Currently, it is very difficult to borrow sufficient funds to take on a mortgage which had previously belonged to a couple.

Mortgage advisers who are CeMAP trained can help find the most suitable solution for divorcing couples.