Can you buy a new house during a divorce?.

At a glance

• Buying a house during a divorce is possible, but timing can be challenging.
• Funds may be tied up in a property sale or financial settlement.
• A bridging loan can help you move sooner.
• You’ll need a clear repayment plan, such as refinancing.
• Your borrowing power and options (e.g. downsizing or Shared Ownership) may be more limited.

Divorces drag. Lives don’t.

Even in the most amicable separations, it usually means at least one person needs to find somewhere new to live. The problem is the divorce process itself can take an average of 69 weeks in England and Wales. That’s a long time to be stuck in a short-term solution like renting.

You might be waiting on your financial settlement or for a marital asset like the family home to sell, which means you don’t yet have the funds to buy somewhere new. That’s frustrating when you’re trying to create some stability, whether that’s for your family or just a fresh start.

That’s often the time when you need flexibility while you reassess your situation, and where a short-term bridging loan might help.

It gives you access to the cash you need to move on with your life now, while you wait for your financial situation to settle and your money to become available.

What is a bridging loan?

Put simply, a bridging loan, which is regulated by the Financial Conduct Authority (FCA), gives you access to the funds you need to purchase your new home now, and up to 12 months to repay the loan and interest in full once you receive the money from a property sale, divorce settlement or another source (such as an inheritance), subject to confirmation and lender assessment.

At Together, the loan would need to be secured on either the current marital home (if both parties agree and subject to legal and lender approval) or the new property. Failing to repay within the agreed term may put your property at risk and you will incur additional penalty costs as a result.

What to consider

A bridging loan can help you move quickly, but it isn’t a long-term solution. You’ll need a clear plan for how you’ll repay it within 12 months, often called an exit strategy.

One of the most common repayment routes is refinancing onto a longer-term mortgage. But because your financial situation may have changed significantly, it’s worth understanding early on whether you’ll still qualify for a mortgage, and whether the repayments will be affordable over the long term.

For example, you’ll now be applying as a single applicant, which may reduce how much you can borrow. You might also have new financial commitments, such as child maintenance or spousal support, that lenders will take into account.

You may also have mortgage payments that you’ll need to keep making on your previous property, until it is sold or an agreement on ownership and equity is made.

Lending decisions are based on your individual circumstances, including your affordability and the progress of any property sale or financial settlement.

Can I buy a new home whilst getting a divorce?

Yes, you can.

But, as we touched on above, you may not be able to borrow quite as much or afford the same monthly payments. So, what does that look like in practice?

Downsizing

You may need to compromise on space or location to find something within your new budget. But downsizing can also bring benefits, including lower deposits, reduced utility costs, and less ongoing maintenance.

Shared Ownership

If you need more space, or don’t want to compromise on location, you may be able to buy a percentage of a property through a Shared Ownership scheme. You’ll pay rent on the remaining share, with the option to increase your ownership over time.

First-time buyer status

If you moved into your partner’s home before or during the marriage, your eligibility for first-time buyer benefits will depend on whether you’ve previously owned a property.

In the UK, the official definition of a first-time buyer is someone who has never owned a residential property.

If you were added to a mortgage but did not have a legal ownership interest in the property, such as being named on the title deed, you may still be treated as a first-time buyer in some circumstances.

If you do qualify, you’ll be able to take advantage of Stamp Duty tax relief and be eligible for affordable housing schemes. However, it isn’t always straightforward, so it’s worth checking how lenders and schemes will assess your position.

Auction purchases

Auctions, both online and in person, can offer opportunities to buy property below market value. It means you may be able to pick up larger properties or homes in a more desirable location at a discount compared to purchasing through a high-street estate agent.

However, purchases typically need to complete within 28 days, so it’s important to do your research to see if there are any issues that need resolving and have finance in place before you bid.

Bridging finance can help you meet those deadlines or provide the funds to complete any renovations or improvements that could be needed to secure a full mortgage.

However, it is a short-term solution only, with up 12 months to repay the loan. This means that you need to be sure that you’ll qualify for a mortgage or your funds will be in place before the term runs out as failing to pay could put your property at risk.

Divorces drag. Moving on doesn’t have to.

Every situation is different, especially during a divorce. Speaking to a specialist lender can help you understand what’s possible, what you can afford, and what your next steps might be.