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Mortgage Capacity Reports

Published: 05 October, 2023

By Matthew Helyar

Navigating the complexities of divorce can be overwhelming for many individuals, particularly when it comes to property division and mortgage considerations. With this in mind, and with the introduction of the new Standard Directive in March 2022 which requires all divorcing couples to provide indicative material of their borrowing capacity as part of divorce proceedings, we have received numerous enquiries regarding the availability of Mortgage Capacity Reports.

Whilst this is something that we have always offered at Adanac, the changes to legislation presented us with the opportunity to review and improve our offering. With the assistance of Sophie Smith, our head of Pensions and Divorce at Adanac, we re-launched this service at our Family Law Update Seminar in May 2023 and since then, we have successfully completed numerous reports for solicitors and clients directly involved in family law cases.

At Adanac, we recognise that the division of assets, including the family home, is often a crucial aspect of divorce proceedings; and so understanding the significance of Mortgage Capacity Reports in such situations is vital. In this article, we will explore the concept of Mortgage Capacity Reports and their importance within divorce proceedings.

What is a Mortgage Capacity Report?

A Mortgage Capacity Report, also known as a mortgage affordability assessment, is a document prepared by a qualified mortgage professional. Its primary purpose is to assess an individual or a couple's ability to secure a mortgage loan based on their income, debts, and financial circumstances.

In the context of divorce, this report can help to determine whether one party can afford to keep the family home by refinancing the existing mortgage or by obtaining a new mortgage.

Importance in Divorce Proceedings

The family home is often one of the most valuable assets that couples own. In many divorces, one spouse wishes to retain ownership of the home. A Mortgage Capacity Report plays a crucial role in determining if that individual can afford to take over the mortgage or refinance it in their own name.

Divorce brings about significant financial changes for both parties involved. A Mortgage Capacity Report provides a realistic evaluation of the individual's or couple's financial viability to handle the mortgage payments post-divorce. It takes into account factors such as income, creditworthiness and existing debts to assess their ability to meet the financial obligations associated with home ownership.

Armed with a Mortgage Capacity Report, divorcing individuals can negotiate from an informed position. They can have a clearer understanding of their financial limitations, allowing them to make more informed decisions during property division discussions.

Costs and Timescales

Our standard Mortgage Capacity Report costs £195 with no VAT to pay.

We can include additional scenarios, for example including spousal maintenance payments or differing amounts of deposits, and these are charged at £50 per extra scenario.

Please note that this fee is per person, rather than per report.

We aim to get the Mortgage Capacity Report back to you within 5 working days.

Get in Contact

It's important to consult with a qualified mortgage professional experienced in divorce-related matters to obtain a comprehensive Mortgage Capacity Report. With this information in hand, divorcing individuals can approach property division negotiations with clarity, confidence, and a firm grasp of their future financial obligations.

If you would like to discuss our offering in more detail, or if you would like to instruct us to prepare a report, then please email your enquiry to [email protected] and we will gladly assist you from there.

Alternatively, please pick up the phone and call us on 01935 848 764.

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