You are here: Home - News -

Divorced borrowers kept out of court

by:
  • 10/08/2001
  • 0
Charcol has launched a new mortgage product designed exclusively for the divorcee market, by treatin...

Charcol has launched a new mortgage product designed exclusively for the divorcee market, by treating maintenance payments as a normal salary without need for a court order.

The product, Divorcee Mortgage, is being offered exclusively through Charcol. Recognising that many settlements are agreed out of court, borrowers are only required to confirm maintenance payments with a solicitor’s letter. Unlike other lenders that typically lend up to a maximum of 75%LTV for maintenance payment salaries, this product offers a standard mortgage for loans up to 80%LTV.

Ray Boulger, senior technical manager at Charcol, said: ‘The Divorcee Mortgage enables those receiving regular maintenance payments from their ex to obtain a loan in their own right, without going through the courts. With maintenance payments treated the same as earned income, this mortgage recognises this reliable but often ignored income source .’

But Rob Clifford, managing director of mortgageforce, said many other lenders also offer good deals for divorcees and that borrowers should be warned that without a court order, their maintenance payment income could stop at any time.

‘This product is not totally extraordinary, as many lenders offer mortgages to divorcees as long as maintenance payments are validated by bank statements. These days, lenders do take maintenance into consideration, even in the absence of a court order, and we have placed around 85% of our cases involving divorcees with mainstream lenders. However, this product does add value for loans over 75%LTV. Most lenders apply an ‘on merits’ approach to loans over 75%LTV, so 80%LTV as standard is a good deal.

‘But borrowers should be warned that if they are receiving maintenance payments without a court order, they could lose out if they suddenly find themselves without this crucial element of their income. The next logical step would really be an MPPI product to protect against losses,’ said Clifford.

Tags

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Exclusive products from Exchange

By Ben Marquand The Exchange is set to launch a new range of mortgage services which will include ac...

Close