Property in divorce

PoloPonyHampshire

Dont know if this is allowed here but in a divorce if the family home is valued at £500,000 but there is a mortgage of £360,000

If the divorce asset split is 50/50 would the asset split be half the property value or half the value of the equity?

Guest101

Half the equity. Between u, u own £140,000, not £500,000

Caroline_a

Not necessarily. If the marriage is of short duration (I think under 2 years) then the financial settlement should put each side in the same situation they were before they married. So if one party has put in, say £100,000 deposit, and the other nothing, then they would get that in a proportion of the final money.

Mojisola

PoloPonyHampshire wrote: »

If the divorce asset split is 50/50 would the asset split be half the property value or half the value of the equity?

Caroline_a wrote: »

Not necessarily. If the marriage is of short duration (I think under 2 years) then the financial settlement should put each side in the same situation they were before they married. So if one party has put in, say £100,000 deposit, and the other nothing, then they would get that in a proportion of the final money.

But it sounds as if the plans are for a 50/50 split in this case.

Guest101

Caroline_a wrote: »

Not necessarily. If the marriage is of short duration (I think under 2 years) then the financial settlement should put each side in the same situation they were before they married. So if one party has put in, say £100,000 deposit, and the other nothing, then they would get that in a proportion of the final money.

Correct, but that wasn't the question. OP said in a 50/50 split...

PoloPonyHampshire

Thank you all, yes the marriage was 12 years :-)

[Deleted User]

The split may be in a different proportion if there are children to consider

TBagpuss

the asset which you own is the equity. If you think about it, if the house is sold, then the mortgage would have to be paid off, so what you would have left is the equity.

If you are not planning to sell, buit one of you is buying the other out, then normally what you would be looking for is for that person to clear the current mortgage so that the person leaving is no longer liable, and to get a new mortgage in the sole name, normally for the amount of the existing mortgage + 50% of the equity 9or whatever other proportion is agreed) to buy out he departing person.

So if you have agreed an equal split, then the person keeping the house would need to be able to borrow a total of £430K, (£360K to pay off the exisiting mortgage plus £70K to buy out the other owner)

That person will then own a house worth £500K with a mortgage of £430K so their net asset will be worth £70K

The other person will have no house, no mortgage, and cash of £70K so you have the equal split.

That said, unless you are both the same age, have exactly the same income, earning capacity, other savings and pension, and have no children, then it is likely that it may be more appropriate for the split to be something other than 50/50 to take into account all of the other factors.