Mortgage lenders cater for newly divorced people

January 12, 2016 by Brendan O'Neill

Lenders

According to research, the number of divorces spikes on the first Monday of the New Year and throughout January. Some mortgage lenders appear to be taking steps to factor in the altered financial circumstances of newly divorced couples.

One lender which has taken steps to make it easier for a newly single person to buy a home is the Ipswich Building Society. The Divorce Mortgage Programme has been launched by this lender specifically for those that other lenders would generally turn down for a mortgage.

The Ipswich Building Society will accept the total sum of child maintenance as part of the household income, although others may only accept a percentage, while others refuse to count this as income. However, the maintenance must be due to be paid for at least five years, and be supported by a court order or the Child Support Agency.

David Hollingworth of London and Country, said that many people face problems if the mortgage term is longer than the expected time scale for maintenance payments. The lender may need to know whether a borrower has additional income to cover the cost of the outstanding loan.

Problems may also occur for those parents who are paying child maintenance, as the cost will be deducted from the borrower’s annual income when conducting affordability tests. If the original mortgage on the family home falls into arrears, both parties will end up with a poor credit score which may affect their chances of buying a future home. Mortgage advisers, who have been fully trained and have gained the CeMAP qualification, can help with a range of problems, including buying a home after divorce.