Going through a divorce is never easy, and when it involves shared finances like a mortgage, things can get even more complicated. If you’re in a situation where your ex-partner has stopped paying their share of the mortgage, you’re likely feeling a bit stuck and unsure of what to do next. While every case is different, there are a few things you *might* consider to help manage the situation.

What if Your Ex-Partner Stops Paying the Mortgage?

First, we’d like you to know that this is not an exhaustive list or legal advice, and just provides general ideas. It’s worth speaking to a qualified legal professional.

One common issue people face after separation is when an ex-partner stops contributing to the mortgage. If this happens, you may find yourself in a tricky spot, especially if you’re still living in the property or jointly responsible for the payments. Missing mortgage payments could lead to more serious issues down the line, like the possibility of a forced sale if things aren’t sorted quickly.

A good first step is to get in touch with your lender. While they may not *have to* offer leniency, some banks may be willing to work with you to find a temporary solution. This might include reducing your payments for a while, switching to interest-only repayments, or offering a short-term mortgage holiday. None of these options are guaranteed, but they’re worth discussing with your lender to see what’s possible.

Possible Options When Your Ex Stops Paying the Mortgage

If your ex has stopped paying the mortgage, there are a few longer-term options you might want to explore. Keep in mind that these are just *possibilities*—nothing is set in stone, and what works for one person may not be right for another.

Refinance the mortgage: If you’re able to afford the mortgage on your own, refinancing it under your name alone or with a new co-borrower could be an option. However, this depends on your financial situation and whether the lender is on board. If not, and you are able to possibly refinance with a new partner and your ex partner is in agreement, we might be able to organise a loan for this. We could also organise this with another bank or lender, if your current lender is not agreeable to it. Information that may be required include a standard application, income details, bank statements, and so forth. Naturally, it’ll also typically go through financial assessment by the lender(s).

Sell the property: Sometimes, selling the home and downsizing to something more affordable is the most practical choice, especially if you can’t manage the payments by yourself.

Legal involvement: In some cases, you might be able to seek help from the courts if your ex is refusing to contribute to the mortgage. But legal proceedings can be time-consuming and the outcome may not be what you expect, so this is something to possibly think through carefully.

It’s important to note that these are just a few examples—there could be other solutions depending on your circumstances. This list isn’t exhaustive, and each situation is different.

Speak to the Experts

If you’re dealing with an ex-partner who isn’t paying their share of the mortgage, it’s a good idea to speak to a lawyer who specialises in family or property law. They can help you understand your rights and what options are available to you. A financial adviser or debt counsellor might also be able to offer some guidance on how to manage things in the meantime, especially when it comes to talking to your lender.

There’s no “one-size-fits-all” approach here, and getting professional advice will help you make the best decisions for your situation.

Keep the Lines of Communication Open

If possible, try to keep communication open with your ex-partner. It’s not always easy, especially if the split wasn’t friendly, but having a conversation about what happens next can sometimes prevent things from getting worse. If that’s not an option, legal advice can help you figure out your next steps.

Final Thoughts

Dealing with a mortgage when your ex-partner has stopped paying can feel overwhelming, but there are options to explore. Whether it’s contacting your lender, looking into refinancing, or seeking legal guidance, every situation is different. It’s always a good idea to get expert advice tailored to your specific circumstances. Remember, this is just a starting point, and there may be other avenues to consider.

The last review of the OCR by the Reserve Bank saw the regulator drop the rate by 0.5 points. Subsequently, lenders revised rates downwards to reflect the RB move. One can say that “Kiwis are laughing all the way to the bank”. Borrowers are enjoying better loan terms and bigger loans. This is reflected in the borrowing trends, especially of home loans. The average loan values have been rising and riskier (low deposit) mortgages  more common. On the other hand, credit card debt has ballooned.

With a higher debt to income ratio, New Zealand homeowners are at a higher risk of mortgage stress than ever before.

If you are already stretched to the limit with mortgage payments, mortgage stress could be looming. But are you prepared for it?

Read on and learn how you can handle it.

Build a savings reserve

Building a savings reserve may sound ironic right now but that’s exactly what you ought to do.

It’s time you took advice from one of the most successful investors in history – Warren Buffet. Spend what you have after saving.

You may have to be more realistic and check your spending.

Are you spending on what you need? Or are you trying to keep up with the Kardashians?

Reach out to a financial advisor or debt counselor and work out ways to cut your expenditure so that you can save. The more you have in your savings, the higher your chances of surviving a rate hike without being scathed.

Change the Mortgage Structure

If you are already experiencing mortgage stress, and your budget is stretched to the limit, you may need to review the mortgage structure.

Perhaps you had the ambition to finish paying off your mortgage in less than 15 years. So you took up a shorter-term mortgage. Or maybe your income has dipped, perhaps due to the loss of a partner through death or divorce, or due to a job shift.

Whatever the case, a review of the mortgage structure and terms can go a long way in relieving mortgage stress.

You can talk to the lender and discuss your options before you miss any payments.

In your discussions, consider stretching the loan term and reducing the installment payments. You’ll pay more interest in the long run, however, your credit integrity will be intact. This is what will help you live to fight another day.

Reach out to a bad credit mortgage broker

For many people, mortgage stress is often accompanied by denial.

When you fail to appreciate that you are unable to make mortgage payments and bury your head, you become vulnerable to a mortgagee sale.

If you’ve missed a few mortgage payments, it’s undeniable that you are experiencing mortgage stress. Unfortunately, the lender bank may not be as considerate as you expect and they may serve you with a PLA Notice. If that’s your case, reach out to a bad credit mortgage broker and explore your options of refinancing with alternative lenders.

It may seem like a more expensive option at first. But, it gives you room to breathe.

You can sell the home and downgrade to a more affordable home, or you can get much-needed time to get back on your financial feet.

Don’t let mortgage stress push you to a mortgagee sale. Reach out to a lawyer or a trusted mortgage broker and have them help you through these options.

When you use a mortgage to buy a home, the lender retains charge over the title until after you have paid off the entire loan according to the contract. If you fail to make payments, the lender has the right to repossess and sell to recover the debt. When a lender takes debt recovery steps, it is could end in a mortgagee sale.

But the lender must do it according to the law.

Although the process of a mortgagee sale may not be quick, a couple of weeks or months could feel like a few moments, especially when you are trying to save your home.

Fortunately, you are not helpless. You can buy time and avert a mortgagee sale.

Here are a few tips to help you.

Reach out to the lender

Don’t bury your head in the sand or assume that the lender will not do anything.

It might not be the easiest thing in the book, but you can face your adversary straight. It may feel embarrassing and you may not want to go through all that, but as Mark Twain puts it, eat the frog first. The other tips will feel a lot easier.

When you reach out to the lender, be ready to explain your situation and propose a repayment plan. The lender can accept or reject your proposal, or they can counter it.

It’s advisable to have an experienced mortgage broker by your side to help in the negotiation.

Pay the outstanding amount

The lender will demand full payment of all outstanding amounts. If you have already received a letter of demand or a PLA Notice, you will see this request appear conspicuously on the letter or notification.

Unless the lender has decided to recover the entire loan secured by the mortgage (after non-payment and expiry of a PLA Notice), they are most interested in receiving payment of only what’s outstanding. This could be a couple of missed installments, interests and penalties.

If you have a means of paying off the outstanding amount immediately, do so. You could sell off an asset, like a car, or stocks you hold and use the cash to repay the outstanding amount on the mortgage.

This will buy you much-needed time as you’ll have reset the clock back to zero and the debt recovery process back to start.

Talk to a suitably qualified lawyer with the right kind of experience

Mortgagee sales are often intertwined with legalities. It is always advisable to seek the help of a suitably qualified legal advisor like a lawyer to help protect your interests.

But some lawyers specialize in home rescue and they can do more than just advise you. You can have such a lawyer negotiate on your behalf and represent your interests.

Armed with legal expertise and experience in mortgagee sales, such a lawyer can negotiate, on your behalf, in ways that you couldn’t. They may be able to secure for you more time to sell the home without a mortgagee sale tag, get an alternative lender, or secure a more stable source of income.

Explore government assistance or insurance

Could it be that you are facing a mortgagee sale because you lost your source of income due to an accident, or an unforeseeable illness?

If that’s the case, you can reach out to the Accident Compensation Corporation, a Crown Entity that gives up to 80% income compensation if you are out of work due to injury.

Alternatively, check with your insurer if your policy includes some sort of loss-of-income cover. If it does, this could be a great boost to your mortgage payment efforts and an excellent bargaining chip for more time.

But you’ll need assistance from an experienced mortgage broker throughout the process.

Reach out to a Specialized Mortgage Broker

There are mortgage brokers who specialize in mortgage rescue and averting mortgagee sales. These brokers have a wider net of lenders whom they work with and can advise you on where to get emergency refinancing solutions, even with bad credit.

A bad credit mortgage broker can guide you through the above steps and also negotiate on your behalf with the lender. They can buy you more time to get the right solution and avert a mortgagee sale.

The official cash rate in NZ has been on a steady decline over the last 5 years. The latest cut drove it to 1% and triggered a ripple effect to lenders who in turn cut loan interest rates. Homeowners have been enjoying this steady decline. Many have opted to refinance and shift to differently structured mortgages or cheaper loans. The end goal is to make savings on your home loan payments.

Refinancing home loans may be an easy move if your credit score is in the green. But what if your credit score sank and it’s not the same as when you took the mortgage? What if you are in the red? Can you refinance your home loan with bad credit?

Read on and find out what are your options

What is “bad credit” and What are the odds of refinancing a home loan with bad credit. 

Like many other markets across the globe, lenders in New Zealand are increasingly relying on credit scores as an important criterion for approving loans. However, it is not the only criterion. A credit score is a statistical approximation of the likelihood of payment of a loan based on a historical assessment of how you’ve managed your financial affairs.

A good credit score (often above 700 out of a possible 1000) implies that the borrower is a good financial manager who is more likely to repay a loan. The opposite applies to a low score (below 500). Most conventional lenders peg the home loan credit score at above 500 A lower score would trigger risk mitigation measures by the lender such as a higher interest rate or tougher requirements like mortgage protection insurance or both.

When your credit score is not so good, you’ll have a harder time refinancing the mortgage. Your goal is to convince the lender of your trustworthiness without using the credit score. This may be hard. But there are options which you can explore like alternative lenders who have less stringent credit score rules.

Where to check for financial assistance

There are lenders in the market who have shaped their business models to cater to people who have had credit issues previously and it affects their credit score. It’s an excellent opportunity for you to get your financial footing back, and rebuild your credit score.

Bad-credit home loans in New Zealand are typically offered by non-bank mortgage lenders such as building societies and credit unions. Since these institutions are often privately funded, they are not subjected to the same rules as banks. Thus, they are more flexible and can take in odd cases. But you still must make your application worthwhile. A mortgage broker for bad credit mortgages can give you directions on how to do this.

Making your application more attractive – highlight your positives. 

Lenders, even non-bank mortgage lenders, often view borrowers with low credit scores as risky borrowers. Therefore, for your application to catch the attention of a lender, you may need to highlight additional qualities that reflect positively on you. For instance, you can show that you’ve held a steady job over the last couple of years.

It’s crucial to show that you have a steady income. This is your ticket for fixing your credit score.

Show the lender that you have savings 

You can also show that you have savings in your bank account. Lenders like borrowers who have a sort of cash reserve which could in handy in the event of an emergency. However, a huge savings balance doesn’t count as much as consistent and steady savings over a long time. Consistent savings over time also depicts that, despite your low credit score, you have good financial discipline.

Bring on board a guarantor

Before you get a non-bank mortgage lender to trust you, you may require to convince someone close to you that you are a responsible borrower and get them to guarantee your loan.

This may be hard to do since it means that they will be on the hook if you fail to repay. However, your spouse or a close relative may be willing to get into the mortgage boat with you and co-sign. But he or she must have a good credit score. Otherwise, their signature will not have much of an effect on your application.

What will a bad credit home loan cost you?

Bad credit mortgages are typically pegged at a higher rate than the average market rate. This is because of the perceived increased risk. But the opportunity cost – the benefits that you can secure – often compensate for the costs. This is especially so when you work with an experienced bad credit mortgage broker to secure a fair deal.

Better still, if you keep on a steady financial path and commit to improving your credit score, you’ll probably refinance the mortgage to a better deal in the future.

So, reach out to a bad credit mortgage broker and learn how you can refinance your home loan.

With the banks dropping mortgage rates to historic lows, many homeowners who were in mortgage trouble are looking to get a breakthrough and perhaps reclaim their homes. However, due to tough lending criteria by banks, this drop in interest rates seems like it an opportunity that could pass you by.

If you have received a demand letter from the bank or a PLA Notice, it’s hard to negotiate with the bank. You need a rescue plan before the window closes. After all, everyone knows that the interest rates will eventually come up again sooner or later.

What are your options? Can second-tier lenders help rescue your mortgage?

Trying Another Bank May Not Yield Much

You may be considering to try another bank for a refinancing deal. But that’s a far-fetched ambition. Each bank has unique lending criteria. But there is a common trend among mainstream lenders. Chances are if your bank wouldn’t give you the audience, peer lenders will also reject you.

Second-tier lenders or alternative mortgage lenders are an option you should consider.

Previously, these institutions were considered as the “lenders for the bad creditors.” But that’s far from the truth. They are just alternative lenders.

Who is a Second Tier Lender?

Second-tier lenders are institutions, other than banks or credit unions, that can lend to the public but are not regulated by the Reserve Bank. They, like all other lenders, must still conform to the consumer protection laws and regulations. So, you can rest assured that there’s nothing dodgy about them. However, these institutions are often funded privately (or by specific interest groups).

That means, second-tier lenders, unlike banks, don’t rely on customer deposits to lend to borrowers. Private investors take up that role.

This deviation from the traditional banking formula accords second-tier mortgage lenders more flexibility, unlike conventional lenders and banks. However, it also means that they are limited in size, thus more vulnerable to economic fluctuations.

What are the Pros and Cons of Second Tier Mortgage Lenders?

The most obvious benefit is flexibility. When you reach out to a second-tier mortgage lender it’s not a matter of whether the computer said a yes or no to your application. You’ll have a real conversation with a mortgage officer who will evaluate your application uniquely.

Better still, if you work with a mortgage broker, the broker will help you find an ideal lender and prepare your application. This doesn’t mean that second-tier mortgage lenders don’t have a qualification criteria. They do. It’s only that it may be more flexible than banks, and applications are often evaluated on a case-by-case basis.

Traditionally, borrowers have stayed away from second-tier lenders because of higher interest rates and fees. However, second-tier lenders have become more competitive, offering rates that could rival mainstream lenders. Moreover, their services are more personalized and intimate.

Rescuing Your Mortgage

You may have encountered financial headwinds and perhaps it has spiraled to a mortgagee sale situation. If that’s your position and you are thinking that your credit record is a train-wreck or no licensed lender could rescue your mortgage. It’s time you reach out to a bad-credit mortgage broker to find out more about second-tier mortgage lenders.

They have more flexible terms and could offer you a refinancing deal to give you that much-needed break. Whether you want help for a short term (6-12 months) or a medium-term (3-5 years). You can try a second-tier lender for a mortgage refinancing deal.

It may cost you slightly more interest and fees. But, if it means getting back your home, it may worth every penny.

Are you having a hard time making your monthly mortgage payments? Perhaps your income has significantly declined over the last couple of weeks due to a relationship breakup or an unexpected financial dip. You are probably experiencing mortgage stress and you should reach out for help.

If you have missed a couple of mortgage payments and the bank doesn’t seem to understand your situation, you should call a bad credit mortgage broker. They look beyond your credit score or bad credit history to understand your situation and help you to get out-of-the-box solutions.

Read on and find out why you should reach out to a bad credit mortgage broker experiencing mortgage stress.

Who are Specialist Bad-Credit Mortgage Brokers and How can they Help?

These are mortgage brokers who specialize in advising homeowners who are in mortgage trouble, have bad credit and need out-of-the-box solutions.

Bankers and ordinary mortgage brokers often focus on “normal” applications. If your case doesn’t meet standard policy, they would most likely reject you.

However, bad-credit mortgage brokers have an outlook that everyone deserves another chance. After all mortgage stress often comes about due to an unfortunate event like losing a job or divorce. All you need is a financial break.

Bad credit mortgage brokers work with an array of lenders, including second-tier lenders. They may help you get a fair deal with a more flexible alternative lender.

Why Speak with a Specialist Broker?

When you encounter financial headwinds and miss a couple of mortgage payments, the bank will demand payments. Most banks have very stringent lending, and loan management criteria. Sometimes banks may not understand your situation. If the computer says no, it’s a big NO.

That’s not the kind of audience you’d want when you are experiencing mortgage stress. Moreover, making too many applications with different lenders will make your credit score worse.

If you have missed a couple of payments, you may be staring at ultimatums and threats of a mortgagee sale.

Are you in such a fix?

A specialist bad credit mortgage broker will take the time to listen to your story. He or she will gather information about your defaults and the circumstances and propose out-of-the-box solutions. It’s much better than walking straight into a rejection by your bank or other standard brokers and lenders.

What Will the Broker Do?

When you approach a bad credit mortgage broker, expect the same kind of personal questions as you would from an ordinary broker or bank. They will also request you to complete a brief form giving details of your financial position.

However, unlike a normal mortgage broker, they will help you comb your credit report, identify and understand the ‘dark spots’ and assess if it is viable to continue with the mortgage.

If it is not viable, the broker will advise you on how to make the best of the situation. If it’s viable, the broker won’t just hand you another mortgage document looking to close a deal. They will help you find alternative lenders. They will also help you to formulate a way through the current crisis.

It doesn’t matter whether it’s mortgage stress due to recent events or a bankruptcy issue. You can reach out to a bad-credit mortgage broker and seek help.