Houses, mortgages and separation

Zxcv_Bnm

I am not sure whether this belongs in here or elsewhere so apols if there's a better place.

My situation is as follows. My unmarried partner and I have 2 kids (7 and 10). She doesn't work. I pay for everything.

We own a house under a deed of (mis)trust, so that 33% is hers and 67% is mine. She put in equity to help buy the house, and I put in a combination of equity and the mortgage.

The mortgage is in joint names at the lender's insistence. So are the deeds.

The mortgage balance is about 35 or 40% of the house's value. This we think based on Zoopla is around £1 million. So if we sold today and split up, she'd get £330k and I'd get £670k. But I'd redeem the mortgage out of my share, leaving me with £300k or whatever.

The issue I have is this. If we split up and I moved out, I'd have to support the children. But I would not be able to make general support payments, and keep up the mortgage payments of about £3,200 a month, and house myself somewhere else. I would not be able to afford all that.

What's then the position with the house? It would probably cost about £3,300 a month to rent. But technically two-thirds of the house is mine anyway. So can it ever happen that I let them all stay, but deduct £2,200 (two thirds of the notional rent) from the support payments I'd have to make, on the grounds that she's in effect renting 2/3rds of the house from me?

If it transpires that I can't afford to keep them in that house while housing myself, what then happens? Can a sale be forced so that we each get our equity out? She would not be able to find a place big enough for herself and 2 kids around where we are; I know that in some circumstances she can claim shelter but what would prevail, her need for it or my need for it?

She is likely however to inherit a substantial amount soon, which would change this. Would that make a difference?

RAS

Since you are not married, the distribution on sale would be as per the deed of trust.

I think however you need to get legal advice as to whether she could delay a sale until the youngest child is 18/leaves school.

The normal situation is that the partner leaving pays CMS and the partner is responsible for paying the mortgage using Mortage Interest Allowance (a benefit claim). but I doubt it would extend to the sort of value you are discussing.

TBagpuss

As you are not married, the court would not automatically have to consider the children's needs on sale. It would potentially be possible for her to make a separate application under the Children Act, but it is unlikely that a court would make an order which resulted in you having to pay the mortgage but not be able to live in the house, unless your income are such that that would be affordable.

In terms of you paying child support, you and she could agree an arrangement whereby you paid the mortgage instead of paying direct child support. If she got CSA/CMS involved then they would not normally take this into account unless the property was in her sole name.

It might be possible to come to an agreement whereby you sold the proeprty and you then lent her money (secured by a legal charge) to allow her to buy a smaller property and for you to have the option of buying elsewhere with a new mortgage.

Are you expecting to separate, or is this theoretical? Given your children's aged
s, is there any reason why your partner could not start to look for work, at least part time, perhaps with you starting to do more in relation to child care and household work so there was a more equal split of roles between you.

Zxcv_Bnm

She is 55 and unlikely ever to work again. She has no marketable skills and might make minimum wage in Costa although she would consider herself far too grand to do so.

I would not be able to house myself unless the shared house were sold. I have a flat I let out, but if I moved back into it, in the BTL mortgage would end, the rent would stop coming in, and the mortgage would have to become a repayment. The monthly outgoings on the two would then be about the same and in total would be 100% of my post-tax basic income. I get annual bonuses worth about another 70% but with strings attached and paid annually several years in arrears.

So there's no way I can move out and still afford to pay. If I altered the mortgage on the co-owned house to interest-only, it would become possible, but the lender would have to agree and it's unclear how the mortgage would then eventually be settled.

The question I guess is what might I be ordered to do? I know divorce courts can order ex-husbands into debt, and can take assets away, but this would not be a divorce.

impartialobserv

She is 55 with a seven and ten year old? Wow!