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What happens if your ex defaults on your joint mortgage?

When you and your partner take out a joint mortgage, you both agree to pay it together. But what if your partner stops making payments? Let’s look at what happens if your ex defaults on your joint mortgage and how you can deal with the situation.

What are the legal implications of getting a joint mortgage?

When you have a joint mortgage, both of you are responsible for paying the mortgage. This means that if one person stops making payments, the other person has to pay the whole amount.

In other words, if your ex stops making mortgage payments, you may have to pay the whole amount yourself. This can prove very difficult for you to manage and may also affect your credit score. In turn, this can make it harder to get loans or credit in the future.

What are my options if my ex defaults on our joint mortgage?

If your ex defaults on the mortgage, you have only a few options:

  • You can continue making mortgage payments to keep the property. You should also talk to the lender to see how you can move the joint mortgage to a single-name mortgage.
  • You can ask the court for an “occupation order”, which allows you to stay in the property temporarily while you sort things out. This can give you time to sell the property or restructure the mortgage.
  • You can sell the property to pay off the mortgage and any other debts associated with the divorce. This might be a good option if the property has increased in value since you bought it.

Whichever option you choose, you should also talk to a lawyer to understand your rights and options. They can help you figure out what to do and how to protect yourself.

How can I protect my credit score?

A joint mortgage default can significantly impact the credit score of both of you. The default will be recorded on both credit reports, making it more difficult to secure future loans or credit. It is essential to address the default as quickly as possible to minimise the damage to your credit score.

Here is what you need to do:

  • Talk to your ex as soon as you suspect they might default on their share of the payments.
  • If they agree to move the mortgage to your name, then your mortgage lender can potentially help you. They can either mark the existing mortgage as satisfied and open a new one in your name, or simply remove your ex from the agreement.
  • Once the mortgage is in your name only, reach out to each of the credit reference agencies (Experian, Equifax, and TransUnion), and request a “Notice of Disassociation”. This is essentially a request to remove the financial link between your ex and you. Once the notice is approved, your ex’s actions will stop affecting your credit score and lenders won’t look at their credit score when reviewing your loan applications.

You should also continue working on your own credit score to soften the blow of any impact from your ex’s actions.

Luckily, now there are many apps that can help you build and improve credit.

One such app is Wollit. Wollit is an app available both on Android and iOS, and it works by reporting a fixed-fee monthly subscription as a loan repayment to all three credit reference agencies.

This gives you a chance to continue building your own credit history and maintain or even improve your credit score without the fear of financial associations and without having to be linked with someone else’s credit rating.

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