Deposits, mortgages & housing needs following a divorce

How Skipton Building Society's zero-deposit mortgage could help after divorce

Skipton Building Society have extended their zero-deposit mortgages to now be available to those who have previously owned their own home, but not during the past three years. One group which is expected to benefit from this offer, are those presently renting following their divorce.

How housing needs are assessed during a divorce financial settlement

One of the key factors when assessing financial settlement following divorce is the parties’ respective housing need. Most couples will not be able to afford two properties similar in price to the marital home. Finances simply won’t stretch that far.

The Court will assess both parties’ respective housing need based on the living arrangements for the children, size and value of the marital home. Both spouses will be able to put forward to the Court houses they consider appropriately meet their own and the other’s housing need (often referred to as ‘property particulars’) and how it is considered these be affordable.

How mortgage affordability can affect a divorce settlement

Affordability will be assessed based on the available capital and respective mortgage raising capacity which can meet any shortfall.  

The spouse with the higher income can often find themselves receiving less than half of the total capital assets, reflecting their greater mortgage raising capacity and therefore requiring less towards an initial deposit. However, where in the past it was always considered reasonable to assert that sufficient capital was required towards at least a  10% deposit, such an argument could theoretically now be flawed based on Skipton Building Society’s offer and other similar mortgages available.  This could have a further knock-on effect, both in respect of the amount required to borrow and resulting repayments too.

Why accurate housing evidence is important in divorce cases

There is no specific definition of need. It is a matter for a Judge to assess. Ensuring accurate property particulars and detail as to how these can be afforded can have a significant impact on the overall financial settlement and help to ensure your housing needs are appropriately, and affordably met.

If you require any further advice or assistance in relation to anything above, please call our Family Law team today on 0113 227 9285.