What happens to a mortgage when a couple separate? 

What happens when a couple separates, one partner moves out and then refuses to maintain the mortgage payments? 

Does the remaining borrower have options? RS

MailOnline Property expert Myra Butterworth replies: I’m sorry to hear that you are now having to deal with financial pressures on top of the difficulties of a separation.

But it is important to consider your options carefully, as the outcome may result in you having to make some further life-changing decisions, such as moving home.

Even if one partner has moved out, if you are both named on the mortgage you are both responsible for making sure payments are made – and the consequences of not doing this can be severe.

Above all, it is imperative that you both keep up with the repayments until you decide what to do, and if you are struggling to do this, to contact your lender as they may be able to help with ways forward in the interim – such as a payment holiday.

We have spoken to a mortgage broker, an estate agent and a lender for their views and it may be worth taking additional legal advice.

Ultimately, both borrowers are liable for the repayments if they are named on the mortgage and so hopefully the situation can be resolved swiftly and efficiently. 

Colin Payne, associate director of mortgage broker Chapelgate, said: In the event of a separation, it is important to ensure that mortgage payments continue to be paid on a monthly basis.

Ultimately, if both parties are named on the mortgage they are jointly and severally responsible, meaning that they are individually obligated, as well as jointly, to make the payments.

Therefore, if borrower A fails to make a payment, borrower B should. 

As for the lender, they will require their debt to be serviced each month and in the event that payments cease, the mortgage will fall into arrears and this will be reflected on the borrowers’ credit file, which will negatively impact on any future credit requirements.

If it becomes apparent that due to a separation it will be difficult to maintain regular monthly payments, then both borrowers should contact their lender to discuss the issue. 

Lenders are sympathetic to borrowers at this time and will do what they can to assist – and there are various ways in which they may be able to help.

For example, a payment holiday, extend the mortgage term to reduce payments and there are other potential arrangements that could be agreed to allow lower payments to be made.

It cannot be stressed enough however, the importance of maintaining the contracted monthly payment, so if an arrangement is agreed to make reduced payments, then depending on the detail, it may well still negatively impact on the credit file in weeks, months and years to come.

Ideally, both borrowers will be able to come to an arrangement between themselves to maintain future monthly payments.

Inevitably, at some point, one borrower may wish to be removed from the mortgage.

If the remaining borrower is happy to take the mortgage on in their sole name or even with another party – such as a parent – arrangements could potentially be made for a transfer of equity with the existing lender. But it is important to understand that the lender will need to approve such a request. 

For instance, they will need to deem it affordable, alternatively it may be possible to re-mortgage or both borrowers may simply decide to sell the property in order to clear the mortgage in full.

Ultimately, if monthly payments or an arrangement is not maintained the lender may consider possession proceedings. Such a course of action is unlikely to be taken lightly and not until the mortgage was at least three months in arrears.

It is important to understand that this is a last resort for lenders and is only likely to happen in the event that mortgage payments have simply ceased for a number of months and there is little or no communication between borrower and lender – or multiple arrangements that have been approved have not been maintained.

Paul Elcino, financial services director at online estate agent Strike, agreed: Whether you have taken out a joint mortgage with a spouse, civil partner, relative, or a friend, it means that you are both ‘jointly and severally liable’ for the mortgage. 

That means if you and your partner decide to separate, you will both have to come to an agreement on how to pay the mortgage. Walking away from a joint mortgage is not an option.

If you fail to make your mortgage payments as a result, your lender will hold both of you liable. This means they can pursue both of you for any arrears. Even though one of you may have continued to pay a share of the mortgage, this principle remains unchanged. 

Another thing to remember is that couples’ credit records can be intertwined and any unpaid debts including an outstanding mortgage with an ex-partner, could impact on your long-term credit rating.

While some lenders might be able to overlook any concerns they may have on other unpaid debt at times, depending on the amount and circumstances, mortgage arrears is a no-go across the board.

This leaves couples who are separating with two choices – sell or stay and pay.

While the option to sell may be a hard decision to make, it’s usually the most straightforward short-term solution for most couples.

If one party wishes to stay, they need to be able to prove that they can manage and make the mortgage payments from their salary alone, which can be done through their existing lender directly or by re-mortgaging with a different lender. 

However, if both incomes were needed to obtain the existing mortgage, then it is likely that the lenders will not be comfortable with one income being taken away. 

No matter what, you should always be upfront and communicate with your lender about your separation as they might be able to provide some supportive short-term solutions.  

James Pagan, head of mortgages at Nationwide, said: While both parties remain on the mortgage, they’re jointly and severally liable regardless of whether they remain in the property or not. 

Anyone in financial difficulty should get in touch with their lender as soon as possible to discuss what options are available. 

For example, one of the parties could apply for a Transfer of Equity to remove someone from the mortgage if the remaining borrower is able to continue the payments themselves. 

However, this requires co-operation and agreement from both borrowers. If both borrowers are unsure of the legal implications of a separation they may also wish to seek independent legal advice.