Dividing the family home and mortgage during separation if you were cohabiting

If you are splitting up from your partner and own your home between you, one of the biggest financial decisions you could face is what happens to it. Find out what you need to do and what your options are if you are not married or in a civil partnership.

First steps to take

This article is aimed at couples who are not married or in a civil partnership and who are trying to work out what to do about the family home after the breakdown of their relationship.

If you are in the early stages of separating and want some information about protecting your rights to live in the home, read our guide Protecting your home ownership rights during separation.

Understanding how the home can be divided

If you and your partner jointly own the family home, you have several options about what to do with it when you separate. You may decide to:

  1. Sell the home and both of you move out. You could use the money you’ve raised to put towards buying another home for each of you, if you can afford to do this.
  2. Arrange for one of you to buy the other out.
  3. Keep the home and not change who owns it. One partner could continue to live in it, perhaps until your children are 18 or leave school.
  4. Transfer part of the value of the property from one partner to the other so that your children have somewhere to live. The partner who gave up a share of their ownership rights would keep a stake or ‘interest’ in the home. This means that when it is sold he or she will receive a percentage of its value.

Prioritising the needs of your children

If you and your partner are splitting up and you have children, it’s important to think about where they will live. As couples who live together, you don’t have any obligation to support each other financially after your break-up, but as parents you’re expected to pay towards the cost of your children.

One parent may be able to make a claim against the other for the right to remain in the family home. How you do this and the laws that give you these rights vary around the UK. It doesn’t mean you or your ex-partner would own the home or a share of it, but they may be given the right to live there for a number of years, usually until the youngest child reaches a certain age.

Making a claim for a share of the home’s value

If the home is in your ex-partner’s name only, you may be able to make a claim for a share of its value. There are different laws that enable you to do this, depending on where in the UK you are.

This is a very complex area of the law and it’s essential to take advice from a solicitor who specialises in the law relating to cohabiting couples.

Making a claim in England or Wales

You may be able to establish what’s called in legal terms a ‘beneficial interest’ if you’ve paid towards the mortgage, or towards improvements or an extension.

You may also have a ‘beneficial interest’ if, for example, your ex-partner bought the home in his or her name but you had an understanding or agreement that you’d have a share in its value when it was sold.

Making a financial contribution doesn’t mean you’re automatically entitled to a share in the property. But you can make a claim even without you and your ex-partner having signed a formal legal document saying you’re entitled to a share in the property.

Making a claim in Northern Ireland

You are entitled to receive back any money, such as mortgage payments, you have contributed towards the family home; however, two conditions must be met:

  • you must be able to provide evidence of the payments you’ve made, through bank statements or similar
  • you will only be able to receive a payment if there was enough equity in the property at the time you and your ex-partner separated

Making a claim in Scotland

You may be able to make a claim if you have been ‘economically disadvantaged’ (you are financially worse off) or your ex-partner has been ‘economically advantaged’ as a result of the relationship.

This could be because:

  • you’d given up work to look after your children
  • you were persuaded by your ex-partner to sell your property and move in with him or her
  • your ex-partner is able to buy property because of the financial contribution you’ve made

You only have one year from when you separate to make a claim, so you should think about taking advice as soon as you can.

Sorting out the joint mortgage

Many couples who have a joint mortgage and who split up, usually try and separate the mortgage so only one partner has their name on it. Whether this is possible depends on the couple’s financial circumstances. The advantages of doing this are:

  • The partner whose name is taken off the mortgage should be able to borrow more to buy themselves a home than if their name was still on their ex-partner’s mortgage.
  • The partner who stays in the house doesn’t have to rely on their ex-partner for their mortgage.
  • Both partners may be able to break the link that ties their credit files together. If you have a joint debt with your ex-partner (such as a mortgage or a loan), your credit files are connected. That means how you manage your debts will affect your ex-partner if he or she applies for credit, and vice versa.
Read more about your credit report in How to check your credit report.

Talking to your mortgage lender

If you want to take over the mortgage in your name alone, your lender will want to make sure that you can afford the payments.

Under Financial Conduct Authority (FCA) rules, lenders must ask in-depth questions and carry out more checks to make sure that you can afford a mortgage.

Options if you can’t afford the mortgage on your own

If you or can’t afford to take over the mortgage, you may be able to get a ‘guarantor mortgage’. This is a mortgage where a close relative agrees to guarantee the mortgage payments if you can’t.

Becoming a guarantor is a serious legal step as it means the guarantor is responsible for paying the whole mortgage if the mortgage borrower cannot. Make sure whoever acts as your guarantor takes independent legal advice and talks to a mortgage broker, before agreeing to anything.

Our guide on finding the right mortgage deal can help you decide.

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