After a divorce, the transition from a dual-income household to a single-income household can be overwhelming; especially when children are involved. This case study explores how strategic financial planning helped Sarah secure stability for her family.
The Situation
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Sarah, a 35-year-old part-time administrator, was going through a divorce. Her primary goal was to provide stability for her two young children (ages 4 and 7) by remaining in the family home. However, she faced several significant hurdles:
Income Constraints: Her part-time salary alone wasn’t enough to satisfy traditional lending criteria.
Credit History: She had a limited individual credit profile.
The Buy-Out: She needed to find a way to pay out her ex-partner’s share of the equity to transfer the deed into her name.
The Professional Strategy
Sarah worked with Liddle Perrett to look beyond the surface-level numbers. We implemented a four-step plan to make the “impossible” mortgage possible:
Holistic Income Review: Instead of just looking at her payslips, we included child maintenance payments and government benefits to prove her true “repayment power.”
Targeted Lending: We identified niche lenders who are specifically flexible with non-standard income sources.
The Guarantor Solution: To bridge the gap in her credit and income, we arranged a guarantor mortgage with Sarah’s parent, providing the lender with extra security.
Legal Coordination: We acted as a project manager, liaising directly with Sarah’s solicitor to ensure the refinancing and the legal transfer of equity happened simultaneously.
The Result
By leveraging a guarantor and utilising all available income streams, Sarah successfully remortgaged the property in her own name.
The Outcome: Sarah and her children were able to stay in their home, avoiding the stress of moving and maintaining the consistency of their school and social lives.
Key Takeaways
- Maintenance Matters: Child maintenance can often be counted as valid income with the right lender.
- Support Systems: A guarantor (like a parent) can be the “missing piece” for someone with a lower income.
- Expert Guidance: Navigating a divorce buyout requires close collaboration between a broker and a solicitor.