The Ipswich Building Society unveiled its Divorce Mortgage Programme yesterday (4 January), on s-called ‘Divorce Day’ – the first working Monday after Christmas when legal firms typically see a surge in queries from spouses planning to separate following the festive period.
The mutual says the initiative is part of its focus on providing support for mortgage misfits who are often overlooked by other banks and building societies.
All of the lender’s residential mortgages will be available to divorcees with 100% of the income from child maintenance taken into account when assessing affordability, provided it is supported by the Child Support Agency or Court Order and has at least five years to run. This allows newly single parents, working full or part time, to have access to the mortgage market.
All applications will undergo a manual underwriting process meaning each case will be considered on its specific circumstances. When assessing affordability, the Society’s underwriting team will accept the applicant’s evidence over the Office for National Statistics data for certain items when lower than the suggested average.
According to the Office for National Statistics an estimated 42% of marriages now end in divorce with the highest rate recorded amongst those within the 40-44 age bracket .
Paul Winter, chief executive of Ipswich Building Society, said: “Despite a significant number of people across the country having been through a divorce, there is little consistency in terms of lending criteria for divorcees. Some banks and buildings societies will accept just 50% of income from child maintenance, whilst others refuse to accept this as a form of income at all, limiting single parents’ access to the mortgage market.
“Furthermore, with the divorce rate highest amongst those in their forties and increasing amongst the older generation, this can add to the difficulties older borrowers already face when looking for a mortgage.”