Joint mortgage & separation/divorce problem

lolamancity

Hi

Can anyone help, i'm mega confused and not that well up on borrowing money.

I split up with my husband, and father of my 10 month old child a couple of months ago. Wanted an amicable split initially, especially so he could stay close to his son, so he's carried on living in the house, but the situation is becoming more unbearable by the day.

I've just had my house valued at £85k.

I have a fixed mortgage til the end of October 2010. There's £37k left owing, with 18 years left on the term. We only pay £240 a month for the mortgage, and this is prob about as much as i can afford on my own.

I need to buy my husband out of it, but i don't know how that works. Anyone help?

We have £23k in savings, for the record.

Obviously i'll have to remortgage next year when the fixed term runs out. I could do with keeping my mortgage payments to stay around what i pay now, £240 a month. Obv i need to buy him out so i don't know what bearing it has on anything.

ALSO, i will need a couple of grand in cash for home improvements going forward. I can't afford those as i don't have the spare cash, but have heard of people adding these costs into a mortgage/remortgage... is this possible, how is it possible and will it have a massive bearing on my monthly payments?

Basically, i wanted to do everything 50/50, or as near to as possible.. after all, i split up with him and he's the one who has seemingly lost everything. However, me worrying about his situation is making our immediate future impossible, as neither of us can think straight. He's done a few things recently that have toughened me up and made me a bit harder, and now i'm firmly determined to get this sorted as soon as possible for the sake of the three of us. He needs to leave, and soon. However I DO NOT WANT to get lawyers/solictors involved. This will make things bitter and will add uneccessary expense on the top of something that's going to hurt us both financially, hard, as it is. I would like to think we're both sensible enough to sort this between ourselves.

So, questions:

Could i keep my mortgage payments around the same each month as present by just extending the term (and borrowing a bit on top?)... whacking it back to 30 years is no biggy... i'm only 25, and not going to be in a position to ever move house again probably, so extending the term isn't going hurt me (i think!). Or does it just not work like that?

I was considering proposing that anything i do owe him outstanding after i've given him the savings (after all, that's all i have to give him) proposing some sort of agreement where for X amount of years, i don't take ANY maintenance money off him for the baby to pay off what i'd owe him, then he'd need to resume the maintenance after that's all squared. Is that a reasonable proposal?

So, i need to get a written proposal together for him to leave the house

The way i need to start things is by deciding which route to go down, and which is going to be the most financially viable for me. After all, i've got to a point now where i need to make sure my son and I can live a reasonable life hereon.

The way i see it is that i've got two options.

I either:

remortgage and pay him off (bear in mind i only have 1 year left on my fixed rate, and would quite like to avoid having to remortgage a couple of times in a 1 year, due to the fees added on for doing it, and the early meddling fees i'll incur against the fixed rate deal) After i givehim my share of the £23k savings, it's looking like i'll need around 14k to pay him off. Obviously i can whack that on a remortgage and extend my whole mortgage term longer than the years i have got left on it now. Obviously this is going to mean my mortgage payments per month go up, but i'd be getting child maintenance payments towards that (lets not even mention the £600 pcm nursery fees i'm going to have to start paying within a few months from now)

OR

Ask him for NO child maintenance payments for roughly 6/7 years, and leave the mortgage as it is (roughly, i hope!) He's worked out that he'd have to pay £45/£50 a week, so i roughly worked out that if i took no money off him, then it'd take me 6/7 years to wipe out the 13k needed to pay him out of the house.

Linked to this, there's one further point a thought of, where i take no child maintenance payments off him until my fixed term mortgage expires next year, THEN pay him off when i remortgage, THEN take the child maintenance payments AFTER he's paid off the mortgage/house. This might mean i'm p*ss taking a bit though won't it? like it'll seem like i'm just dithering to get the best deal for myself and not taking into account the fact that he needs to buy a new property/furnish it, buy a new car etc?

Should also bear in mind that he's giving me the car we share, which is worth roughly £5.5k. He said that doesn't need to be taken into account though. Which brings me to my next point - i don't want to have any financial links to him (over and above those connected to the child and his upbringing) ever again. A few people have mentioned to me that i could come to an agreement where i give him half of the money i make from the house sale, whenever i sell it, but i have no plans to sell in the future to be honest, and i'd rather not have that overwhelming financial connection to him over that many years.

Should also add, i am currently on Maternity Leave still. I technically start getting paid again today (due to annual leave owing) but don't return to work until the end of September. This has made things harder as i can't try and work out how i can afford to live, as i don't know what tax credits etc i will be able to get, esp as he's still living in the house, my wage being based on maternity leave figures AND nursery fees haven't started to be paid yet. Therefore, i don't know whether i can afford all this yet, but such is the situation that i'll have to address that matter once it's all sorted, or in the pipeline.

Question is, which of the above, is the better route to go down?

Any opinions?

Apologies for being such an amatuer about all this, and being so naive. I honestly have never had to live on my own, or manage money, so i'm pretty clueless. At the moment i feel so out of my depth it hurts. I actually feel like a 6 year old having to deal with stuff that is far far too grown up than i can or should have to cope with. Obviously it's all my own doing, and i have to get a grip on it all sooner or later, but my state of mind at the moment makes it hard.

Apologies for the huge post, and thanks for your time.

getmore4less

First you don't have to remortgage when the fixed rate ends you can just go onto the follow on rate, what are the fixed and follow on rates?

Your lender may not be happy about you taking on the mortgage if it will be a struggle so that needs investigating to see if it will be possible.

If you split 50:50 you have £85k + £23k so that is £54k each less 1/2 the mortgage £18.5k so to buy him out you need to find £35.5k and you only have £23k so thats another £12.5k from somewhere.

If you borrow against the house that means a mortgage of just under £50k a LTV of better than 60% so OK, but can you afford it.

I would knock a bit off for the car but do you need it they are a big drain on resourses look at ways to not need a car.


I think you probably should go for the pay the maintanence route, it is less complicated long term and makes for a cleaner break now with no overhang except for the regular payments.

Mrs_Bumble

Go and see a solicitor, get your legal position sorted, financial settlement and child access sorted.

Do not agree to no maintenance payments, he is legally responsible for assisting with the upbringing of his child.

Once you return to work, any tax credit claim will be assessed on whether you are a one parent family or a two parent family and you can claim assistance with the childcare. You can ring the tax credit helpline and ask them for guidance now so that you can estimate what your financial position will be.

Get legal advice on what can be negotiated etc as far as buying him out, don't let your feelings about the split get in the way of a fair deal for both of you being worked out.

What you can borrow in relation to remortgaging and extending your borrowing will be dependant on your income and credit committments etc, it is unrealistic to think that you can keep the borrowing around the same monthly payments as you have now even by extending the term.

Get legal advice, then once you have an idea of what is likely to be expected in relation to a split, what expected child maintenance payments will be made you can speak to tax credits and see what assistance there you can expect and can get a better overall picture of what the financial situation will be.

Trying_to_be_good

I'd agree mainly with Mrs Bumble, except you don't need a solicitor for a lot of it. Particularly DON'T informally set off maintenance due for your child (likely to be 15% of your OH's net income - call the CSA who can be really helpful, honest, and then you don't need to involve solicitors for this bit).

If you chose to split the house 50:50, you need to buy out your OH's share of the equity, not just take on his share of the mortgage. So that's where the £85k value less £37k mortgage = £48k equity gives £24k you need to find to buy him out. There will be legal costs for the conveyancing (house sale/transfer).

Is the £23k savings all yours, or is that joint? If that's all yours, you could agree to handing over the majority of that (perhaps keep back a couple of thousand for emergencies and house stuff) as a clean break on the house.

This would mean you only need a mortgage in your name at the same level as the current mortgage. Would your salary plus tax credits and maintenance payments (less childcare costs) give you enough borrowing power for this mortgage? It may be worth both staying on the title deeds and mortgage until you fixed rate deal runs out, or they may allow you to take the mortgage on yourself - you'll need to call them.

Good luck

lolamancity

thanks all so far, i really appreciate it

the £23k in savings is joint, so basically i've got £11.5k available to give to him