K J Smith Solicitors

Can you apply for a mortgage when your income comes from child support?

Published: 9 February 2016

Many divorcing and separating couples believe that they can't successfully apply for a mortgage when their sole income (or the majority of their income) is made up from payments of child support.

The truth is that it depends on the lender you approach; a small number of lenders will allow 100% of a borrowers income to come from child maintenance payments, whilst other lenders either accept 50% of income from child support or refuse to acknowledge this as income at all, making it very difficult for divorcees to prove that they have sufficient income to be able to make repayments on the mortgage.

Mortgage lenders that do take child support into account do so on the provision that the borrower has proof of the income via a court order or the Child Support Agency (CSA). By the end of 2013, the CSA was replaced by the Child Maintenance Service, with the government encouraging more separating couples to come to their own private arrangements in regards to child support and maintenance payments.

One issue which might lead to complication with the government encouraging private financial arrangements is that couples then make the arrangements between themselves and without the involvement of the CSA or the courts, which might then make it harder to provide proof to lenders who require evidence in the form of a statutory order or via the CSA.

The main problem that divorcees have always faced is the lack of consistency from mortgage lenders in regards to how they view child maintenance payments, which limits a single parents' ability to apply for a mortgage.

This often affects women the most, as they may have had to leave their jobs or reduce their hours in order to look after their children.  In some cases they may be at a further disadvantage if they typically left the responsibility of managing the finances to their partners.

A recent survey from Money.co.uk suggests that just over 25% of women admitted to leaving the management of household finances to their partners, compared to only 8% of men who said the same.

It's not only women that are hit the hardest; divorce rates are particularly high for those in their forties and with the number of elderly couples getting divorced increasing, they too could be faced with difficulties when applying for a mortgage.  

It is always advised that you shop around and speak to different mortgage lenders;  just because one might not take child maintenance payments into account, it doesn't mean that you can't get a mortgage elsewhere. It is also advised that any payments made via private arrangements are paid through a standing order rather than paid in cash, as you will have proof of your child maintenance income on your bank statements.

If you are thinking about divorce or separation then K J Smith Solicitors can help. Our team of family law specialists will work with you to advise on the best course of action for you and your family and strive to deliver the most positive outcome possible. For more information or to arrange a free 45 minute consultation, please contact a member of the K J Smith Solicitors team today on 01491 630000 (Henley on Thames), 020 7070 0330 (London), 0118 418 1000 (Reading), 01753 325000 (Windsor), 01256 584000 (Basingstoke) or 01483 370100 (Guildford).

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