Getting a mortgage after divorce: the facts
With the Mortgage Market Review (MMR) imposing stricter affordability criteria for potential home buyers, specific groups of people are finding it harder to obtain a mortgage, namely older borrowers and the self employed. Due to the way that many lenders assess affordability, divorcees are the latest group to join these so-called ‘mortgage misfits’. The issue here is that many lenders exclude child maintenance payments from their assessment.
With almost half of all divorced couples having at least one child under 16, child maintenance payments can account for a significant proportion of income for a lone parent, particularly if they need to work reduced hours in order to care for them. Lenders who do not take into account income sources such as child maintenance payments are therefore limiting the accessibility of mortgages to divorcees.
Ipswich Building Society is one of the few lenders that takes into account 100% of child maintenance payments in addition to employment income and will also consider an applicant’s evidence if they routinely spend less than the national average on specific items, offering greater choice of mortgage products to divorcees and lone parent households. Visit our infographic for the key facts about this growing mortgage misfits group.