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Mortgage Business aims to give fresh start to divorcees

Specialist lender The Mortgage Business is teaming up with packager The Mortgage Partnership to offer a mortgage designed for divorcees looking to move into a second property while still respon-sible for mortgage payments on the matrimonial home.

TMP says the New Start mortgage, which it will distribute through intermediaries, differs from standard mortgages by treating the divorcee&#39s existing mortgage as an ongoing monthly income commitment rather than as a capital amount.

It says other lenders subtract the full amount that divorcees owe on their joint home from the sum they will loan on a second property, making it difficult for them to afford a suitable new home.

New Start can lend more generous amounts by treating the existing mortgage like a normal loan and offsetting the monthly cost against the borrower&#39s income.

TMP says this is designed to help an ex-spouse who has moved out of the shared home but is still financially responsible for half the mortgage.

New Start is available on a loan to value up to 85 per cent with an income multiple of 3.5 times single income. Interest is charged at a standard variable rate of 5.84 per cent.

TMP director John Mawdsley says: “In many cases, people have to sell their matrimonial home, causing more upheaval, but we can now offer a more generous amount without them having to sell. There is a market as there were an estimated 133,000 divorces in 1999 in the UK.”

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