Manjit Kaur is one of our Later Life Lending advisers, and recently featured on Just Covered a podcast from Legal & General for Advisers…
“When it comes to mortgages and financial separation, or divorce, we tend to see more enquiries in December and January as people explore their options and try to understand where they stand financially. We always recommend the individual speaks with an advisor and other experts to consider things like the value of pensions or the marital home. A holistic approach will make sure the client protects their retirement as much as possible.
When people choose to divorce, they may not think of contacting a mortgage broker first. They’ll probably go to a solicitor. But it’s useful to have a team of expert professionals including a solicitor, financial advisor, mortgage broker who can work together to handle the complexities. Divorcing people are all vulnerable, so it’s important that the professionals involved share knowledge.
How could a lifetime mortgage help with a divorce?
A lifetime mortgage is a type of loan that allows people to access the equity in their home. It’s common for people to use one for supplementing income, but we’re seeing more older clients using these to help loved ones. The rising costs of living and high cost of divorce means more families are having to step in. It’s a way for people to help their children at crucial times whether that’s to avoid going into court and being able to reach a settlement sooner or to buy one person out so they can stay in a family home. The impact on the whole family can be huge.
Unfortunately, some women might not have had as much financial education as their husbands, and they may have left the finances to them during their marriage. They might not be aware of the assets that have built up over the marriage or their rights and options. Women are also more likely to have had a career break to care for the children which means they might have saved left in a pension. They might not understand the consequences of all of this until it’s too late.
Are you divorcing or financially separating?
Family law solicitors often get in touch with us for a mortgage capacities report. This assesses the current situation, assets, debts, income and expenses for their clients.
We may also help the client make a financial plan and achieve realistic goals based on what they can afford and what they need. We look at their financial requirements now as well as their retirement plans, so they know what they’ll need to pay on a mortgage. We can also connect to pension advisers as well for help with affordability in the later life sector. We will always try to consider options that our clients might not have considered – for example whether they can keep their home or should sell it and buy something smaller.”
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Manjit Kaur can be contacted on manjit@themortgagemum.co.uk.
Listen to the full podcast to learn:
– The value of financial advice throughout the divorce process
– How to recognise the financial blind spots
– Why every client needs a tailored approach
We play a critical role in ensuring you emerge from the divorce process with your equity and financial security in a better place.
Listen now: www.buzzsprout.com/2223383
Watch now: youtu.be/BDLaI8hORW0?si=wSxjmyKCZzSsH6a7
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