Going through a divorce is emotional and tough enough for someone without then worrying about your ability to obtain a mortgage.
Following a divorce, your income is of course reduced making it even harder to obtain a mortgage. During financial discussions and negotiations ancillary to a divorce, consideration will need to be given to a party’s mortgage eligibility.
In the past, divorcees and their legal representatives were finding that most mortgage lenders did not take into account 100% or even a proportions of the Child Maintenance received. In some circumstances, Child Maintenance is a large proportion of the main resident parent’s income.
A recent change has seen Ipswich Building Society join a small proportion of mortgage lenders who agree to take into consideration Child Maintenance. Ipswich Building Society have relaxed their rules to take into account the full amount of the Child Maintenance received provided that it is supported by the Child Maintenance Service (or CSA) or a Court Order with at least five years remaining.
Ipswich Building Society join a handful of other mortgage lenders where they will require sight of the Court Order or information from the Child Maintenance Service including Co-operative Bank, Virgin Money and Natwest. Whereas others will take into consideration a proportion such as Lloyds and Yorkshire Building Society.
It is important that you make enquiries with mortgage lenders at the outset of financial negotiations to ensure that the child maintenance receipts will be taken into consideration as this is likely to impact on the outcome of the case. It is however reassuring that the mortgage lenders are now starting to take on board the ever changing society with rising divorce rates and the reliance single parents have on Child Maintenance payments.
Although by most mortgage lenders insisting on having sight of a Court Order or evidence from the Child Maintenance Service it does contradict both the governments and the Court’s stance on the need for parents to reach agreements directly rather than involving Courts and other governing bodies. Hopefully in time, the requirement for this type of evidence will start to relax also and the mortgage lenders will be more willing to simply accept bank statements evidencing the payments in support such as the current procedure at Santander and Tesco Bank.
If you wish to discuss these or any other family law issues, please contact Newtons Family Team on 0800 038 5500 or 01904 409078.