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New Product Available From Charcol
(The information below is a description about the new product from Charcol.)
"What is a divorcee mortgage?
The divorcee mortgage is an innovative solution designed to cater for divorcees who depend on their former spouse for income. It recognises the particular needs of divorcees, and the unusual financial circumstances in which they can find themselves. The key features of this exclusive mortgage are
No court proof of maintenance arrangement is required
Maintenance payments are treated just like salary payments
Borrow Up to 80% of your property value (or 75% with flexible features)
Flexible features allow payment holidays and over/under-payments
No redemption penalties
Standard variable loan rate
This new product is not available online and is only available from Charcol, the UK’s leading independent financial and mortgage advisers, as an exclusive mortgage solution. Charcol’s divorcee mortgage is unique to the market, but its hallmarks – flexibility, innovation and customer-focus are typical of their service and product range. Charcolonline is part of the Charcol Group, and through this relationship can offer you access to this exclusive product. Click here to read about Charcol
What are the advantages of a Charcol divorcee mortgage?
For many divorcees the unique flexible underwriting criteria will make obtaining a mortgage far quicker and less stressful. For others who may normally find themselves unable to obtain a mortgage it may provide the solution. This mortgage gives borrowers the option to make under and over payments as well as taking payment holidays, ideal should any complications arise with payments.
The loan does not require court proof of a maintenance agreement, while treating these payments in the same way as a salary.
And, should your circumstances change there are no redemption penalties for remortgaging.
What are the key innovations of Charcol’s divorcee mortgage?
It requires only a solicitor’s letter as confirmation of maintenance payments, recognising the fact that many maintenance settlements are not agreed through the courts. As most people would consult a solicitor on the break up of their marriage, most divorcees will benefit from these criteria.
It treats maintenance payments in the same way as normal salary payments. The divorcee’s annual documented maintenance payments are grossed up on the basis that these sums are received tax-free and then conventional multiples are applied as with normal salary payments.
There are a choice of two schemes at the lender's Standard Variable loan rate, to meet the individual’s needs and borrowing requirement:
One offers a straightforward mortgage for loans up to 80% of the property’s value
The other offers flexibility to those with larger deposits. Available for up to 75% of the property’s value, it allows payment holidays, over and under-payments and the option to increase borrowing by a further 5% after three months' mortgage repayments have been made
There are no redemption penalties, leaving divorcees free to remortgage at anytime should their circumstances change in the future (such as re-entry to the job market).
Why has being a divorcee been a problem when it comes to mortgages?
Until now, despite the high ratio of divorces to marriages, the majority of mortgage lenders have not had any criteria that take account of this increasingly common circumstance. Those receiving income from an ex-spouse would normally be required by a lender to prove that any maintenance payments have been agreed through the courts. Even then they would only be able to borrow a lower than normal percentage of the property’s value, assuming they could find a lender prepared to offer them a mortgage.
Until now the picture has been even grimmer for those who do not agree maintenance through the courts; in many cases these divorcees have simply been refused a loan. Those lucky enough to have a lender to consider their case would at best face a long and drawn out process, where the individual could end up receiving a smaller loan to value (LTV) than they require."
(information taken from http://mortgages.charcolonline.co.uk)
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