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A Mortgage Capacity Report provides you with a bespoke report, outlining how much you could borrow under a mortgage, following divorce/separation.
The Basics
Going through a divorce is undoubtedly a challenging and stressful experience, and one of the most significant hurdles is determining the division of assets and property. The family home, in particular, stands out as a crucial asset, and deciding who retains ownership and how to manage the associated financial responsibilities can lead to substantial tension and conflict.
The lack of a clear understanding regarding each spouse’s capacity to handle a mortgage independently can impede fair and informed decision-making about the family home. This ambiguity often results in frustration, financial strain, and, in some cases, legal disputes.
To address these issues, a Mortgage Capacity Report emerges as a valuable tool, offering a transparent and impartial evaluation of each spouse’s ability to take on a mortgage. This report considers factors such as individual income, expenses, credit history, and debts, serving as a guide for equitable decisions regarding asset and property distribution.
What is a Mortgage Capacity Report?
A Mortgage Capacity Report, also known as a Mortgage Capacity Assessment, provides a formal outline of the amount you may be able to borrow, as well as other mortgage details, for example the type of mortgage that you might qualify for, post-divorce or separation. It is a comprehensive report tailored to the specific circumstances of the individual, produced by a qualified Mortgage Adviser.
What information do I need to provide?
The report will be based on factual information about you and your circumstances, albeit various different scenarios can be explored based on possible/anticipated changes in these circumstances. The basic information you’ll be expected to provide will include:
- Income
- Debts/financial commitments
- Savings/investments
- Current mortgage details
- Property information
- Children/dependants
We’re provided a more detailed breakdown at the bottom of this article.
What’s the process, and what’s in the report?
You’ll meet with one of our qualified Mortgage Advisers, which can be done remotely, or in person to discuss your circumstances in detail. This allows us to produce a report that is truly bespoke to your circumstances, needs and desires. After a discussion, and assessment, a detailed report will be provided which will include details of the mortgage you would qualify for, including:
- The amount you could borrow;
- Repayment method;
- Term;
- Different types of interest rates;
- Monthly repayment figures;
- Related fees;
- Affordability assessment.
A Mortgage Capacity Report will provide a more reliable outline of your borrowing capacity than using an online borrowing calculator, or even a visit to your local bank; this is because the assessment we provide considers the availability of mortgages from a variety of lenders, rather than just one. Additionally, some Mortgage Advisers will provide a Mortgage Capacity Report based on information submitted to them via a form (i.e. without the need for a meeting with you) which may appear convenient, however at Belle Maison we recognise the limitations in such an approach and our commitment lies in delivering a tailored and comprehensive report, ensuring that every aspect of your financial situation is thoroughly considered.
What is a Mortgage Capacity Report used for?
With your solicitor:
Solicitors recognise the value of this report and may request it on behalf of their clients. This comprehensive tool proves invaluable during the intricate process of dividing assets and property in a divorce. In partnership with your solicitor the report aids you in understanding your ability to afford a mortgage independently, empowering you to make well-informed decisions about the family home. It provides insights into the feasibility of transitioning from a joint mortgage to a single person’s name, offering strategic guidance in this regard.
In court proceedings:
The Mortgage Capacity Assessment can also become a pivotal piece of evidence during any financial settlement process in court. Your solicitor can present the report to the court, facilitating a comprehensive understanding of your financial situation. This aids the court in making a fair decision regarding the division of assets and property.
Where can I get a Mortgage Capacity Report?
That’s easy, we can help! Just visit out dedicated Mortgage Capacity Report support page.
Detailed information requirements:
- Current income, including salary, bonuses, commissions, and any other sources of income.
- Expenses, including rent or mortgage payments, utilities, credit card payments, car payments, and any other regular expenses.
- Credit history, including your credit score and any outstanding debts or loans.
- Employment history, including current job and previous employment.
- Assets, including any property, investments, or savings you may have.
- Liabilities, including any outstanding debts or loans.
- Information about any dependants, such as children or elderly parents.
- Any other information that may be relevant to your ability to afford a mortgage, such as upcoming large expenses or changes in your financial situation.
