What is a Mortgage Affordability Report?
When separating a couple’s finances, there is often a need for at least one separating partner to take out some form of new lending to finance either the purchase of a new home or to buy an ex-partner’s portion of a previously jointly owned home.
Managing the affordability of two homes from newly separated finances can be difficult, particularly in the early years of a mortgage, where borrowing levels are still high. This can be confusing and challenging for couples trying to achieve a fair outcome in their financial settlement. These can be couples of any age, divorcing in their early twenties to late eighties.
Before the first court hearing, both parties must provide a jointly obtained Brief Indicative Material. This is a shortened version of a Mortgage Affordability Report that includes brief information on a couple’s borrowing/mortgage finances. You may need to obtain a Mortgage Affordability Report before the second court hearing.
A Mortgage Affordability Report provides essential financial data to help couples negotiate their financial settlement upon divorce or separation. The in-depth report provides clarity to the couple and their legal advisers on the borrowing capacity and type of mortgage available post-separation. Each report is different and dependent on personal circumstances and the complexity of the separation.
What will a Mortgage Affordability Report cover?
The Mortgage Affordability Report will evaluate every aspect of your finances and assess them alongside a comprehensive range of mortgage lenders’ product offerings and eligibility frameworks. Whereas the Brief Indicative Material will provide basic information and areas for consideration.
The report will look at:
- Your current and projected income – earned, benefits, pension, or investment.
- Your capital assets, whether individually or jointly held.
- Your current and projected expenditure.
- Your mortgage borrowing requirements.
We will analyse this data and share a range of scenarios to demonstrate what mortgage repayments might be affordable for you. In addition, we will provide you with an indication of the total borrowing this might deliver over a series of examples with different life cycles and terms.
Our Mortgage Adviser will meet with you to collect all the data we need about you, your finances, your requirements and your aspirations. This may be via telephone, video call, or a face-to-face meeting.
We will be able to give you some guidance at this stage about the current state of the mortgage lending market.
We will produce our report using up-to-date property and financial market data. We will usually get back to you within five to ten days with our findings following receipt of all requested documents. These reports are often required quickly, so engagement with the adviser is time sensitive.
Our team of mortgage specialists have a wealth of expertise and experience in finding the right mortgage solutions for a range of clients. If you would like to get in touch with our mortgage team, please contact them on 01603 786847 or [email protected].
