Get top tips from Pamela Atkinson, Senior Mortgage and Insurance Adviser at 1st Mortgage Services, about planning for the future and securing a mortgage after divorce.
I’ve been a mortgage advisor for 25 years.
If you were to ask me if I was happy doing what I do, my honest answer would be that I love it.
From assessing affordability and mortgage capacity to writing court reports and supporting clients through the mortgage application process, the people I meet and the days I spend are varied. I’ll never tire of that moment when clients find the confidence they need to go after the future they want, which often involves securing a mortgage.
If you’re going through, or have been through, a separation or divorce and are looking to buy your own home, I’m here to help. Below, you’ll find my insights into overcoming any challenges you might face and top tips for getting your financial house in order.
What are the challenges of securing a mortgage post-separation or divorce?
“I’m really scared”
Fear sits at the top of the list of challenges for clients in this situation. Divorce makes for a tough time, whatever the circumstances.
You might feel vulnerable due to what you’ve been through. You might be asking, ‘what does my future look like?’, ‘how will I do this alone?’ and ‘will I ever have a level of security again?’
There’s no getting away from it. Life after divorce can be a scary place to be.
“I don’t know how all of this works”
A lack of knowledge is a real barrier to progress. This is especially true if your spouse or partner previously took responsibility for the financial aspects of the marriage or relationship.
You’re certainly not alone if you feel like you have no control and don’t know the steps you need to take, and a big part of my job is empowering you with the knowledge you need.
“I don’t want things to change”
It’s common to want to maintain the lifestyle you had when you were married. But it’s also important to be realistic. Building a new future isn’t about chasing the impossible. It’s about finding what will work for you practically and financially as well as emotionally, and redefining what this looks like based on what is possible.
Overcoming the challenges
Starting over after divorce might have its challenges, but it’s all about identifying the steps you need to take to overcome them. Here are my top tips for doing just that.
Use a mortgage broker
I’m not just saying this because I’m a mortgage broker; the benefits speak for themselves. As brokers, we can access specialist tools and calculators to thoroughly and adequately assess your eligibility and affordability. We know the deals available and which lenders offer which terms.
With so many lenders and products to consider, a broker will help you understand where you are now, where you need to go, and how you’ll practically achieve your goals.
Consider your credit rating
Speaking of financial calculators, be wary of using online financial search and eligibility tools, as these can negatively affect your credit score.
Do a full financial appraisal (another thing a broker will help you with) to determine what changes you need to make. Do you have any debt, and if so, how much? Is there a plan for clearing any credit cards you have? What are your outgoings? Can you increase your income, for example, are you entitled to any benefits?
As you do this, gather your financial information in one place. That way, you’ll have everything you need when it’s time to make an application.
What if I have a bad credit history?
If you have a bad credit history, this doesn’t mean you can’t get a mortgage. Many clients worry about this for too long without taking action. Always remember that most things are fixable, and there are things you can do to improve the situation.
Commit to building your deposit
Building a deposit is always sensible if you want to buy a home. Most lenders require a deposit, and the amount necessary varies from product to product.
Depending on your circumstances, saving and budgeting might be the name of the game, and compromises and concessions may be necessary. It’s not always easy, but getting the things you want is worth it.
A note of caution: if you received a financial settlement following your divorce, for example, due to a previous house sale, resist the temptation to spend it. It’s all too easy to dip into those funds, and even easier, to put a not-too-fine point on it, blow it.
Be patient
Getting yourself into a position to secure a mortgage can take time. Sometimes, it’s not about getting a mortgage right now, but more about putting a plan in place to ensure you can get one in the future. I support many clients with this, helping them build a plan, put it into action, and apply for a mortgage when the time is right. My door is always open at every step of that journey.
Future proof
If you’ve been through a divorce, you’ve probably had all the stress and uncertainty you can handle. It’s one of the reasons why I don’t encourage my clients to ‘stretch themselves’ beyond what they’re comfortable with. You need the security of knowing that the mortgage you can afford now is the one you’ll be able to afford a few years later.
Think about the monthly payments you’ll feel you can manage. If you’re receiving maintenance, when is that due to end? And when it does, can you make up the shortfall? A big part of financial security is having a mortgage you can afford, not just in the here and now, but in the future.
I meet with many people in the ‘I can’t get a mortgage’ phase. Overcome with worry about how they’ll manage and that they’ll never be on the property ladder again. If that’s you, it might be time to think a little differently and get the advice you need. Breathe, pick yourself up, and start looking to your future after divorce.
Pamela Atkinson is a Senior Mortgage and Insurance Adviser at 1st Mortgage Services.
pam@1stmortgageservices.co.uk
1 Finkle Street, Thirsk, North Yorkshire YO7 1DA
