Overpayers beware. Continued

tawnyowls

I see this thread appears to have been closed (not sure why), but as Bil2 seems to have some important points incorrectly stated, I think it would be a good idea for the benefit of others reading it if we got those cleared up.

Bil2 wrote:

Re-read my post. Ater taking my overpayments out, the mortgage amount will equal the original purchase amount and the worth of the property (it was valued in March when I re-mortgaged) has only raised by £10,000.

You are, yet again, assuming that the property will be split 50:50. I say, yet again, that this is not necessarily the case. If you take your payments out and convert them to savings, they will still be taken into account as part of your joint equity. If your partner has savings, they will also be taken into account, but if he has personal debts, you will not be responsible for them. So yes, IF, the equity is split 50:50, you would each get 5K (which is not a lot for you to pay), assuming that you were ordered to sell the house, pay the mortgage company and pay the OH his 5K, but again, that is a highly unlikely scenario if it went to court. Is that completely clear now?

Bil2 wrote:

If my OH gets his act together (i.e. agrees to join the morgage in a fair and legally binding Tenants in Common agreement),

Bil2 wrote:

He is adamant that he doesn't want to join the mortgage, so your 'T in C' suggestion won't work in this case.

Why do you want him to do this? If your name is the only one on the mortgage, you are in a far stronger position than if you're both on it. You are confusing being tenants in common with being jointly responsible for a mortgage. When you buy a house and you have two names on the deeds, you automatically become joint tenants unless you specifically request to be tenants in common. The way in which you pay for the house (with a mortgage or straight cash) is completely irrelevant. Ergo, if his name is on the house, and unless you asked for it not to be, you are joint tenants. You do not have to have his agreement to change that to being tenants in common; you can do it whether he likes it or not. You can find out how to do it here: http://www.lawontheweb.co.uk/jointtenants.htm

tawnyowls

Sorry, Gingham Ribbon - didn't see your post. However, I hope you'll allow this to move over there.

Cheers

Bil2

tawnyowls wrote:

I see this thread appears to have been closed (not sure why), but as Bil2 seems to have some important points incorrectly stated, I think it would be a good idea for the benefit of others reading it if we got those cleared up.

You are, yet again, assuming that the property will be split 50:50. I say, yet again, that this is not necessarily the case. If you take your payments out and convert them to savings, they will still be taken into account as part of your joint equity. If your partner has savings, they will also be taken into account, but if he has personal debts, you will not be responsible for them. So yes, IF, the equity is split 50:50, you would each get 5K (which is not a lot for you to pay), assuming that you were ordered to sell the house, pay the mortgage company and pay the OH his 5K, but again, that is a highly unlikely scenario if it went to court. Is that completely clear now?

Why do you want him to do this? If your name is the only one on the mortgage, you are in a far stronger position than if you're both on it. You are confusing being tenants in common with being jointly responsible for a mortgage. When you buy a house and you have two names on the deeds, you automatically become joint tenants unless you specifically request to be tenants in common. The way in which you pay for the house (with a mortgage or straight cash) is completely irrelevant. Ergo, if his name is on the house, and unless you asked for it not to be, you are joint tenants. You do not have to have his agreement to change that to being tenants in common; you can do it whether he likes it or not. You can find out how to do it here: http://www.lawontheweb.co.uk/jointtenants.htm

I've spoken to a family law solicitor (for free, by phone) who told me that any divorce proceedings would start from a 50-50 basis no matter what the circumstances (I informed her of my unusual situation). The 50-50 basis can only be changed when there is compelling evidence to do so. In a fair world, my extra contributions would be recognised, but the solicitor warned me that this is not always the case and that I should be prepared to lose half my assets and equity if I were to ever divorce.

For some years to come (especially now that my mortgage payments and related life insurance and mortgage payement protection insurance will be higher), the mortgage debt be higher than my savings, so as far as I can see on the non-property assets front, for a while yet to come, I'll be in negative equity.

If a 'Tenants in Common' agreement was reached by myself and my husband (i.e. recognition of unequal ownership of the property for e.g. 80-20), then I would happily return my overpayments to the mortgage. I don't want to get divorced! I want a strong and fair marriage and being jointly responsible (albeit owning eunequal amounts) for our home would help towards this! However, my husband does not wish to be added to the mortgage either jointly or in a tenants in common agreement, so it is not possible. His name is not currently on the land registry or on the mortgage deed. I cannot change his status if he does not have a status in the first place!

Have I missed something?

Rimo2021

Putting the overpayments in an individual account will not necessarily protect them:

http://sharingpensions.co.uk/assets3.htm

"It is common for a couple on judicial separation, divorce and nullity of marriage to have a cash balance for emergencies in a bank or building society account.

These amounts form part of the matrimonial assets and need to be identified as part of the overall assets to be divided by the parties, including both individual and joint accounts"

Bil2

Getting tired of repeating myself... but here we go again.

My savings plus the overpayments are less than my mortgage debt and will be for some time to come. My husband can't claim negative assets (at least I don't think that he can!)

For e.g (figures for calculation only).

Mortgage debt: £100,000
Savings: £50,000

I therefore would have MINUS £50,000 in non-property related assets.

Martinslovechild

I know it's not the best advice in the world, but when I was previously married, she wanted to claim 50% of all my savings. When my solicitor wrote to her solicitor with a view to claiming 50% of her savings, she had miraculously sold all her policies and 'spent' the cash .

So my suggestion is for you to 'hide' the cash somewhere, in an account or otherwise (shoebox?), preferably where he's not likely to look. Then, if the question ever gets asked - you've spent it on a 'well needed' holiday

Martinslovechild

Bil2 wrote:

For e.g (figures for calculation only).

Mortgage debt: £100,000
Savings: £50,000

I therefore would have MINUS £50,000 in non-property related assets.

Maybe I have misunderstood, but surely £100,000 of mortgage debt counts as 'property related', rather than 'non-property related' ?

However, reading between the lines, you have a house worth £10,000 more than the mortgage debt, so in your example:-

House £110,000
MINUS Mortgage £100,000
PLUS Savings £50,000

---

EQUALS £60,000

---

Therefore, if the split is 50:50 (assuming that he has no savings), then he gets half of £60,000.

Rimo2021

Bil2 wrote:

Getting tired of repeating myself... but here we go again.

My savings plus the overpayments are less than my mortgage debt and will be for some time to come. My husband can't claim negative assets (at least I don't think that he can!)

For e.g (figures for calculation only).

Mortgage debt: £100,000
Savings: £50,000

I therefore would have MINUS £50,000 in non-property related assets.

Your marital assets are as follows:
a ) value of property minus any mortgage debt
plus
b ) joint and individual savings and other investments
plus
c ) pensions

..so unless your property is worth less than 100k you have assets of at least 50k. If your property has dropped in value below 50k then you have no assets to share as your 50k savings would only cover the negative equity (except possibly pension which can also be divided on divorce)

tawnyowls

Bil2 wrote:

I've spoken to a family law solicitor (for free, by phone) who told me that any divorce proceedings would start from a 50-50 basis no matter what the circumstances (I informed her of my unusual situation). The 50-50 basis can only be changed when there is compelling evidence to do so. In a fair world, my extra contributions would be recognised, but the solicitor warned me that this is not always the case and that I should be prepared to lose half my assets and equity if I were to ever divorce.

This statement now makes it clear why you're so confused. I think you should speak to another solicitor, pronto - I believe the advice given is incorrect (it wasn't FirstAssist, by any chance; have had previous incorrect advice from them?). You only have to look at the cases in the papers to know that a 50:50 starting point is incorrect, even if it wasn't backed up by several of the divorce law websites that I've checked. Take a look at this, for instance: http://www.divorce.co.uk/legal/englandwales/divorcethelaw/financial.htm. It clearly states that 'There are no firm rules about how assets are divided and how much money has to be paid to one or other spouse. The court has a wide discretion to make whatever financial orders it thinks fit. There is no presumption that if the house or any other asset is in joint names, the husband and wife will each be entitled to half.' It's unwise to base your future life on the possibly wrong advice of one solicitor.

Bil2 wrote:

His name is not currently on the land registry or on the mortgage deed.
Have I missed something?

Yes, you have! If his name isn't on the title deeds, he doesn't own the house - you do, in which case, there really would be 'no presumption that the husband and wife are each entitled to half'. He would have to show substantial contribution to be even considered. What you should do is pay the mortgage yourself, and use his money to pay the household bills - even though that can be taken into account in a divorce, it's a lot harder to track.

I think this is probably an inappropriate forum now to discuss this,and perhaps we should finish it - I really feel you need advice from another solicitor. It might perhaps be worth contacting these people http://www.divorce-online.co.uk - you can email a question to them and have it answered by a solicitor.

TimC

Bil2 wrote:

Getting tired of repeating myself... but here we go again.

My savings plus the overpayments are less than my mortgage debt and will be for some time to come. My husband can't claim negative assets (at least I don't think that he can!)

For e.g (figures for calculation only).

Mortgage debt: £100,000
Savings: £50,000

I therefore would have MINUS £50,000 in non-property related assets.

Hi Bil2 - Very interesting threads - however, you seem to be confusing the numbers and the situation, or your posts are ambiguous. For instance in the closed thread you state:

Bil2 wrote:

Re-read my post. Ater taking my overpayments out, the mortgage amount will equal the original purchase amount and the worth of the property (it was valued in March when I re-mortgaged) has only raised by £10,000.

Therefore, from the property equity, that would only be £5,000 each.

If my savings are less than my mortgage debt, then I'll be in negative equity. My partner will have more wealth than me as he doesn't have any debts.

I couldn't sleep last night and I spent the whole time going over this in my head.

Just to correct you on this important point, as it is such an emotive one, particularly for those who owned properties in the early to mid 90s; Negative Equity is when the value of the property is less than the debt owing. Having savings less than mortgage debt is normal - that makes you a debtor (albeit planned and ideally manageable), most of us are in that situation. So even if you follow through on your scenario, as some of the capital has been paid off, and the property has increased in value, you have assets both property and cash that exceed your debts.

Just to add - Negative Equity only becomes an issue should you need to sell the property - then it becomes a loss - the majority of people in or close to Negative Equity managed to sit out the situation until things improved.

With regard to the equitable disbursement of those assets, it seems that reading the recent judgements, anything could happen and I'm not sure that drawing cash back from the mortgage to put on deposit will protect it anyway - it depends upon how contributions are calculated, and that is not just a straight financial calculation.

I don't envy your situation - it can work, I have colleagues who have enjoyed 30+ years of marriage and maintained separate accounts for all manner of reasons - personally my wife and I would never have been able to pay our deposit on our 1st house had it not been for her savings, now she has been a SAHM for 11 years, but I still thank her for having the prudence to get us started, as you can guess everything is ours - for which I feel fortunate. (Except the savings - to keep Greedy Gordon dipping his hand into the interest payments!).

Good luck for the future & hope you are able to sleep at night - TimC

Bil2

tawnyowls wrote:

Yes, you have! If his name isn't on the title deeds, he doesn't own the house - you do, in which case, there really would be 'no presumption that the husband and wife are each entitled to half'. He would have to show substantial contribution to be even considered. What you should do is pay the mortgage yourself, and use his money to pay the household bills - even though that can be taken into account in a divorce, it's a lot harder to track.

I think this is probably an inappropriate forum now to discuss this,and perhaps we should finish it - I really feel you need advice from another solicitor. It might perhaps be worth contacting these people http://www.divorce-online.co.uk - you can email a question to them and have it answered by a solicitor.

On the doc that you pointed me to, it says:

"The matrimonial home
Often, the most substantial capital asset owned by a couple is their house. Regardless of whether the house is owned by one of them or by them jointly, a sale of the property and a division of the sale proceeds may be necessary to meet their needs.

There may be sufficient funds available to buy them each a new home. That is the ideal solution. Where there is not enough money, the priority is to provide a home for the children, more often than not with their mother. The court does however recognise that it may not be fair to deprive the husband of his capital in the long-term and has a wide discretion to make whatever order it thinks fit".

In addition, other info on the website says:

"Be aware of the following key points:

If the property is solely in your partner's sole name and you do not trust them, you should register a caution under Section 4 of The Matrimonial Homes Act or a class F Land Charge. This will ensure that the property cannot be sold or further charges placed on the property without your knowledge, pending negotiations or legal proceedings. This should not be viewed as a hostile act but an action to protect your interest, and care should be taken not to use this in a vindictive way".



...Therefore even if his name ISN'T on the mortgage, he could still lay claim to the property and possibly even be successful in his claim. This is what I'm worried about.