Divorce is typically regarded as one of life’s most challenging experiences. Throw in the additional obstacle of getting a mortgage after a divorce, particularly if your financial position has changed, and you immediately add another layer of potential discomfort.
In 2022, there were 80,057 divorces granted in England and Wales*. The good news is that this represented a 29.5% decrease when compared with 2021. However, it’s still a significant slice of the UK population.
As a Guildford mortgage broker that regularly secures mortgages for divorcees (or those going through a divorce), we understand the sensitives around navigating homeownership as a single person. We also appreciate the additional hurdles that some lenders make applicants climb.
This is why we offer a capacity letter service for those looking to evidence how they can afford a mortgage post-divorce. Let’s take a look at what entails.
What is a mortgage capacity letter?
A mortgage capacity letter – or a letter of capacity to pay – is a document that proves you’re able to honour the financial obligations of a mortgage on your own after having your income, liabilities and expenses reviewed by our team of Guildford mortgage advisers.
It’s well-known that lenders dislike taking risks, so they need to feel assured that divorced applicants are not taking on more liabilities than they can actually afford.
We’re generally asked to prepare a capacity letter for our clients for one of three reasons, which include:
1. You’re looking to retain the marital home and wish to buy out your ex-partner’s share of the property.
2. You wish to apply for a new mortgage that’s solely in your name.
3. You need to demonstrate that you’re capable of meeting the monthly mortgage payments after the consent or court order has been granted.
How it works
Our team of Guildford mortgage advisers will carry out an appraisal of your income – whether that’s from a salary, maintenance payments or both.
We’ll also assess your outgoings and determine the ease at which you can meet monthly mortgage repayments.
Once everything has been evaluated – and it’s clear that you’re able to meet the financial obligations associated with a getting a mortgage on your own – we will prepare an official letter confirming that you’re in a position to take out a mortgage.
What it costs
The cost for us to prepare a capacity letter is £499. However, should you decide to use us to apply for a mortgage on your behalf, then you will not be subject to any broker fees.
So, in effect, you get two services – capacity letter and mortgage broker service – for the price of one.
Whether you’re looking to remain in your martial home and need to take on the mortgage by yourself, or hoping to get a mortgage on a different property, we can help.
Get in touch
To explore capacity letters and getting a mortgage post-divorce, contact our team of Surrey mortgage brokers on 01483 238280 or by e-mailing info@complete-mortgages.co.uk.
*Source: Office for National Statistics
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