Separation Process
A divorce is emotionally taxing enough; the financial settlement regarding your own home often makes it even more complex. When there is a joint property, one partner often wishes to remain in the home and buy out the other. To navigate this process in a legally and financially sound manner, we support you every step of the way.
- ProviderRate %
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ABN AMRO
3.45%
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Rabobank
3.69%
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ING
3.60%
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ASN Bank
3.38%
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Lloyds Bank
3.25%
Make joint agreements.
In the context of a divorce and a mortgage, this often refers to the divorce settlement (echtscheidingsconvenant). In this document, you record who will live where, how the home equity will be divided, and whether alimony will be paid. Without these “mutual agreements” on paper, a bank cannot approve the new mortgage.
What if you can’t work it out together?
A divorce is an emotional period in which it is sometimes difficult to look objectively at the business side of things. If you are unable to reach agreements together regarding the home or the division of assets, a mediator can offer a solution.
The role of the mediator:
- Independent mediation: A mediator is a neutral third party who helps both partners engage in conversation with each other again.
- Joint solutions: Instead of a legal battle, a mediator focuses on solutions that both parties support. This is essential for a smooth settlement of the mortgage.
- Recording agreements: The mediator helps in drafting the divorce settlement. This is where the ‘mutual agreements’ are officially recorded, which is a requirement for the bank to assess the financing.
- Cost and time saving: Mediation via a mediator is often faster and cheaper than a process involving lawyers and the court.
Our collaboration: At Mortgage Center, we work closely with expert mediators. While they ensure the correct agreements are put on paper, we simultaneously calculate the financial feasibility. This way, you know immediately at the mediator’s office whether the proposed agreements can actually be approved by the bank.
Determine the market value (Appraisal/Valuation)
If it has been mutually decided that one of the partners will remain living in the home, a buyout often takes place. To know how much the departing partner will receive (the buyout sum), the current market value must be officially determined. Have an NWWI appraisal report prepared. The home equity is the difference between this value and the remaining mortgage debt. Of course, we have a large network of appraisers we can call upon to take this off your hands.
Alternatively, you can also agree to use the WOZ value (Property Valuation Act), meaning an NWWI report is not always required. We would be happy to explain this further during a no-obligation consultation.
Check the financial feasibility.
This is the moment where Mortgage Center plays a crucial role. We calculate whether the partner who remains in the house can carry the full mortgage and any additional loan for the buyout sum on their own, based on their income (LTI).
On top of that, receiving support in the Netherlands in our mother tongue was truly invaluable. It made everything so much clearer and easier to navigate. We are deeply grateful to have had Engin by our side. He will forever remain a key part of our journey to purchasing our new home in the Netherlands. Thank you, for being such an incredible envoy in making our dream come true!
Thank you!
Request liability release
We submit a request to the lender to grant the departing partner ‘release from joint and several liability’. The bank assesses whether the remaining partner is financially strong enough to carry the debt alone.
Signing at the notary (Deed of division/partition).
As soon as the bank agrees, the notary draws up a ‘deed of partition’. This officially transfers ownership from two people to one person. The mortgage deed is also amended or re-executed.
Financial settlement and a new start.
Once the deed has been signed, the buyout payment will be transferred to the outgoing partner. With the accounts separated and the funding in place, both partners can start their next chapter with financial peace of mind.
Frequently Asked Questions
This is often the main point of uncertainty. The buyout sum is determined based on the home equity.
The calculation: The current market value (determined by an appraiser) minus the outstanding mortgage debt.
The distribution: In most cases (in community of property or a 50/50 split in the settlement agreement), the departing partner is entitled to half of this equity.
Example: Is the house worth €400.000 and the debt €300.000? Then the equity is €100.000 and the buyout sum for the departing partner is €50.000.
Yes, alimony has a major impact on your maximum borrowing capacity (Loan-to-Income/LTI).
Paying alimony: Banks view this as a financial obligation, similar to a loan. This significantly reduces your borrowing capacity.
Receiving alimony: Receiving spousal support can be counted as income by many banks, provided it is established for a longer period in the settlement agreement.
Child support: Please note: received child support is not included as income by most lenders when calculating your maximum mortgage.
It often happens that income on paper falls just short of taking over the full mortgage. In that case, we look at alternative solutions:
Personal funds: You can pay the buyout sum with your own savings or a gift, so that the new mortgage ends up being lower.
Policy rules for divorce: Some banks apply broader assessment rules for divorces (management criteria). They then look at whether the actual monthly costs are affordable, instead of the stricter standard norms.
There is often more possible than you think. Please feel free to contact us about this.