Mortgages for Divorcees

Introduction

A mortgage especially for divorcees is just one of the new deals from mainstream lenders eager to embrace those who often find it hard to borrow.

There is now such a mortgage home loan specifically designed for divorcees who are financially dependent on their ex-partner.

The "divorcee mortgage" on offer from specialist mortgage brokers enables those receiving regular maintenance payments to obtain a home loan in their own right. This new mortgage could throw a lifeline to a sizeable group of people, some of whom would typically be refused a loan.

Lenders are realising the need for specialised plans for divorcees

Many of the UK's leading lenders have now realised that a growing number of high street banks and building societies are starting to woo those people who until recently would have struggled to get a mortgage from a mainstream lender. This diverse group includes people who have had debt problems but also many more who have done nothing to deserve a blot on their financial copybook.

More than 8 million people - one in four of the adult population - have had difficulty obtaining credit from high street banks and other lenders, according to some estimates. It may be they have had problems with debt or have county court judgments (CCJs) registered against them. Some will have had a previously exemplary financial history but were knocked sideways by divorce, redundancy, illness or bereavement and perhaps failed to keep up with their credit card payments

Others will have encountered problems even though their financial position is perfectly sound: people who have been living overseas and so have not built up a credit history in the UK; those people who for whatever reason are not on the electoral roll; and growing numbers of self-employed and contract workers whose income is irregular or who don't have the necessary accounts going back several years.

Credit Scoring Problems

Many people with bad credit have fallen foul of the increasingly automated credit checks carried out by larger lenders where credit scoring decides the fate of every mortgage application. If the applicant fails to reach the required score, the computer-generated rejection letter is automatically sent. It is simply too expensive to ask the customer "why?" once the computer says "no,".

It can be alarmingly easy to end up with a CCJ - in some cases people don't even know they have got one until they come to apply for a mortgage. You could end up getting one if, for example, you rented a TV in a shared student house and then in the hurly-burly of graduation you forgot about it and moved address

Shopping around for a mortgage is especially important if you've got problems with your credit record. Just because one bank or building society has rejected you, this doesn't mean they all will. If you've got only £2,000-£3,000 worth of CCJs and they were settled at least a year ago, you may be able to get a "normal" deal

However, if you are turned down it's not a good idea to apply willy-nilly to every other lender in the high street in the hope that one will come up trumps. That's because each lender will do a credit check and all of these will show up on your credit file. After three or four credit checks you could find you are turned down automatically because it looks like you're desperate and possibly in financial trouble

The first time you are turned down you should find out why. Ask the lender and if they won't say, write to the two main credit reference agencies - Experian (www.experian.co.uk) and Equifax (www.equifax.co.uk) - requesting a copy of your credit file

For more information contact one of Money Advice Direct's trained mortgage specialists on: 0800 074 6918 or email us at: mortages@insolvencyhelpline.co.uk

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Mortgages for Divorcees

Introduction

Lenders are realising the need for specialised plans for divorcees

Credit Scoring Problems

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