Click here to get this post in PDF
The statistics make for depressing reading, but divorce rates in the UK are at least on the decline.
According to data from the Office for National Statistics (ONS), the divorce rate in the UK has been falling consistently over the past several decades. In 2019, the divorce rate in the UK was 9.3 per 1,000 married people, down from a peak of 14.9 per 1,000 in 2003.
Today, divorce is still relatively common in the UK, with around 42% of marriages ending in divorce. The rate of divorce tends to be higher among couples who have been married for a shorter period of time, with around one-third of marriages ending in divorce within the first 10 years.
Dealing with the fallout of a failed marriage can be challenging and traumatic at the best of times. Unfortunately, the financial complications (and near-inevitable disputes) that accompany divorce only stand to make a tough time in life even more difficult.
This is where an affordable bridging loan can help divorcing couples negotiate the complexities of a surprisingly complex financial separation. In specific, there are three ways in which a bridging loan can help speed up and simplify divorce proceedings:
#1. Covering the costs of legal fees in the short term
Legal fees have a tendency to quickly mount up and continue to increase until the divorce process is complete. Where couples may encounter difficulties covering the immediate costs of legal support, representation, professional mediation and so on, a bridging loan could be an ideal solution. Bridging finance provides fast and easy access to a lump sum of money (often within a few working days), which can then be repaid after a few weeks/months when an appropriate resolution has been reached.
#2. Purchasing a new home while waiting for the family home to sell
One of the most upsetting realities of divorce is often that of being forced to sell the family home and to relocate to two separate abodes. The issue is that as it may take several months for a marital home to sell and to complete the transaction, the separating parties find themselves in a difficult position in the meantime. With bridging finance, a new home can be purchased with a loan secured against the equity the applicant has in their marital home. When the property sells at a later date, the loan can be repaid in full, complete with all interest and borrowing costs.
#3. To buy your partner out of the home you own together
Likewise, bridging finance can also be used to ‘buy out’ your former partner, in order to take ownership of their half of the home you owed together. As a bridging loan can be arranged within a few days (rather than several weeks), it can speed up and simplify the process of dividing major assets like homes, vehicles, and other items of value.
How Does a Bridging Loan Work?
A bridging loan is a specialist type of secured loan, which unlike a mortgage is designed to be repaid as promptly as possible. Bridging finance is typically issued over a period of 12 months or less, during which interest accrues on a monthly basis (often in the region of 0.5%).
Various types of assets of value can be used as security for a bridging loan, but most facilities are secured against property (residential or commercial). With all essential paperwork and evidence in place, it is possible for a bridging loan to be authorised and issued within a few working days.
Eligibility is determined primarily on the basis of available security for the loan (in this case the applicant’s home) and evidence of a viable exit strategy. Where both of these requirements are met, it is possible even for those with poor credit, no proof of income, or a history of bankruptcy to qualify for affordable bridging finance.
You may also like: Factors to be aware of when obtaining a bridging loan
Image source: Depositphotos.com