Husband's concerns and part exchanging a house

louiserer

Hi again,

My husband and I have been looking at a new build. This would be a step up and our family home. Currently we have a house each and live in my husbands house. My house has little to no equity where as his could have around £80k. In order for me to be able to contribute to a larger mortgage I would need to clear a loan I have. We had been discussing using £11k equity from his property for this. His equity would also need to pay for stamp duty and the remainder be our deposit. I have been given some advise about what to do with my house in time in order for us to over pay the mortgage when a chunk of money finally works out.

Now, he was ok with this at first but he is now concerned about the fact that all his money is going into the new house. He earns more so will also be paying more to the mortgage.

I don't for one minute think anything will happen to us but it is the sensible thing to think about what would happen to who's money if we were to separate. I have said we would have the solicitors write up that the first £xx of equity from a sale but I don't know what else to suggest?

Also,
One of the options we have looked into is a part exchange of the house we live in. It seems a bit simple to be a good idea. Does anyone have any good or bad experiences of doing this?

Many thanks,

Louise

TBagpuss

in terms of splitting up, it would depend on when it happened, and what the situation was at that time. Generally speaking, the longer you have been together, the less relevant it is to look at who put what in.

So, if you have only recently marries, and were to slit up in the near future, your husband might well be able to argue that it was 'fair' for him to have a larger share of the equity die to his higher contribution. If you were to split up 15 years down the line, it would almost certainly be completely irrelevant. If you have children, then it changes things again - (you can't easily put a price on the value of a parent caring for children, or on giving up work or reducing hours, and the knock on effect that has on career prospects etc)

It would be possible for you and your husband to consider a post-nuptial settlement or declaration of trust about the property, but you might also find it helpful first to sit down, either together , or with a third party just as a RELATE counsellor to talk about your expectations and attitudes towards your finances and your life together. Does your husband think he ought to be entitled to more of a say, or a bigger share if you separate, because he is a higher earner, for instance? Does he see this as something which would only apply in the near future, or longer term? How do you see things?

bclark

Well he is your husband so I don't really understand his concerns. For better for worse, for richer for poorer ......

Gwhiz

bclark wrote: »

Well he is your husband so I don't really understand his concerns. For better for worse, for richer for poorer ......

If only life were that simple!

Prothet_of_Doom

How long have you been married ? I assume only a few weeks ?

So, I'd suggest that you write a list of everything you both own or owe, and sign a simple agreement, hand written that says you both agree, that WHEN you eventually split up, all assets will be equally shared, after the orginal values have been put back in place.
Make it vague so that the lawyers can screw you later on the interpretation.

ie he owns £80K you Owe £10K. If your joint assets including cars, CD's handbags etc goes up to £120K ie it went up £50K, you get £15K back, and he gets the rest. (£105K). That's fair isn't it?

I put WHEN in bold, becuase my tradional view of marriage, suggests it is only successful if you both believe and strive for it never to end.

That vague agreement, put in an envelope, and put in the bin, and never talk of it again.

louiserer

Thank you for your advice

I don't think he is concerned that he will end up paying more in the long run. He earns more and has always paid more for me to live with him than I have, he understands he will provide if we become parents.

The equity he has in the house is mainly a gift from his parents (part of me thinks they would be concerned I might get my hands on it) and the rest will be what he has cleared from his mortgage. He has just been luckier than me in that sense with house values, buying at a better time etc.....

He would also be basically giving me £11k to clear my own debt so I think it is a little concerning for him. He would like me to sell my house because he likes to think theres at least £10k in there but unfortunately there's not Of course in time if I am lucky with my house that money will go into our lifetime house or it will be kept for our pension. Does it make any difference if I put him on the mortgage for my house?

louiserer

We have been married for two years.

I completely understand what you are saying. I have made him look like a monster unfortunately. It used to be that once you were married you had joint accounts that both wages were paid into but it does not seem to be the case anymore.

We don't have an issue with who buys what, it has always been who can afford what at what time. I totally understand what you are saying because if you separated who owns what in the house I have easily brought more and I probably feed him better. I think it it just a concern that it is all his money (or more his parents money!).

DRP

louiserer wrote: »

husband

...being the operative word here.

It doesn't matter if he uses his equity to pay the deposit, or pays more towards the mortgage because he earns more. It doesn't matter if he has been gifted money by his parents. It doesn't matter if you have debt and he doesn't.

You're married so it is all one big pot of money!

louiserer wrote: »

It used to be that once you were married you had joint accounts

It still is, isn't it? We've also been married 2 years and we have a joint account which pays the mortgage and all the bills...

ging84

you are already married
they're both each of your houses
does not matter what you had, what you've agreed or think you've agreed. If you divorce the courts will look at what you both have now, what you each need, what you would have continued to have if you stayed together.
They will take little notice of what happened before you were married, they will almost certainly not take any notice of any agreement made after you married.
Your husband needs to forget about the equity in his house, he's agreed to share it with you. He earns more than you, so depending on how big an income difference he could be in for a very big shock to discover you could be entitled to a divorce settlement that not only take a substantial share of what he has already accrued, but also a share of his future earnings and pension

louiserer

DRP wrote: »

It still is, isn't it? We've also been married 2 years and we have a joint account which pays the mortgage and all the bills...

I think it happens less now than it used to.

I used to be the top earner but also had to work about 20 hours a week more for it so a decision was made for me to change direction which resulted in a reduction in wage. We share our money and treat it as one pot but he has just raised concerns about this equity business. I do think he is probably more concerned what his parents say!

TBagpuss

ging84 wrote: »

you are already married

They will take little notice of what happened before you were married, they will almost certainly not take any notice of any agreement made after you married.

That isn't entirely correct. A post-nuptial settlement can be taken into account just as a pre-nup can.

One option might be for you to have an agreement drawn up (professionally) which states that if you were to separate within a short space of time (say 3 years) and were childless, that he would retain the first £xx of equity (or the first x%)

It is not a cast iron guarantee, as a court would still have the discretion to change it if they Judge felt it was fair to do so, but it would be taken into account and particuarly if it is specifically time-limited it can offer some reassurance to a worried spouse or parent-in-law while recognising that the longer you are together the less important it becomes.

I think the key is to talk with your husband so you are both on the same page