Separating from husband and don't know where to start financially

newwomantobe

I have created a new profile for this as family know my username and I don't want to complicate things.

We have been married 12 years and have a child in primary school. We've fallen apart slowly over the last few years and have agreed (after counselling) that enough is enough. We get on ok but need space. I think ultimately we will divorce but am not ruling out reconciliation way into the future when we have both had some headspace and time to see how we feel.

So the plan is that he moves out but stays local. I had thought rental while we figure things out, however he is adamant he wants to buy. His plan is to remortgage and split the equity. We have about 50k equity.

what do we do?
Is this the best way forward?
I don't particularly want to move so there's some stability for our child, or at least not for 18m-2y. I'm not desperately attached to the house though and OH couldn't afford the mortgage alone.
All our bills are in a joint account with a chunk of wages going in from our personal accounts each month. Pretty much everything is in both our names or my name.
We don't have savings, only childs junior ISA. We both work full time.

Thanks for reading

justme111

If he could not afford mortgage alone how does he expect to buy ?
Remortgaging may be pie in the sky as well.

-taff

he can't buy by remortgaging. What he probably means is you buy him out and remortgage in your own name and he buys separately.
He can't stay on the current mortgage and buy another one unless he has the funds to do so.

Is he talking about using the equity in your current house to buy a BTL?

jamiehelsinki

justme111 wrote: »

If he could not afford mortgage alone how does he expect to buy ?
Remortgaging may be pie in the sky as well.

By buying a cheaper house, with a smaller mortgage than they currently own perhaps?

If he's got to move out and rent it's worth him considering buying as it usually works out cheaper in the long run.

justme111

Ah , you think op meant "he can not afford mortgage on family home".

Kynthia

If he's looking to buy then you are separating. Therefore you should get legal advice on a fair division of your assets. Your assets will include more than just the property, but all savings and pensions less any debts. How realistic is it that you can both increase the amount of debt on your mortgage in order to give him a deposit, as well as then him getting a second mortgage? Will you both pass affordability checks on this extra debt? If he's then paying this second mortgage and child support will you be expected to pay all of the mortgage on your home that's now increased, as well as bills?

Fireflyaway

It doesn't sound like you are 100% sure about separating anyway. Even talking about maybe getting back in the future. Could you make some plans to have a bit of time to yourself instead, just to make sure. Selling the house and splitting up is a huge thing unless you are certain. Could he rent a room somewhere for a few months then reevaluate?

TBagpuss

If you do separate then get a proper separation agreement drawn up so you don't have to go through it ll a second time if things don't work out.

It may make sense to split the finances, but be aware that splitting things 50/50 is the starting point, not necessarily the fair outcome, once you have taken into account differences in your respective needs, incomes, mortgage capacity and so on.

So - can you (you as a single person) afford to take on the existing mortgage *and* borrow an extra £50K?

Can you (as a couple) afford to remortgage to borrow an extra £50K against the existing property and to get a second mortgage on a new property? (bear in mind that unless the current house goes into your sole name, the 2nd property will result in having to pay extra STLD as a second property, and may mean CGT liability for each of you when the property you don't live in is sold or transferred.)

What other assets are there? unless/until you do divorce, you can't split any pensions.

I'd suggest that get some advice before making a decision. It might be very sensible for you to agree that he rents for an initial period of 6 months - it would give you both the chance to see how affordable running two properties is in real life, and to get a clearer idea of what will, or won't work. You could sit down and work out what the rent/mortgage and bills for each property will be, and divide those so that you are each paying a fair share, so neither of you is disadvantaged by the delay.

newwomantobe

Thanks for all of your replies, I'm going to have to read them again slowly. I'm so out of my depth.

To clarify, OH would not be able to afford our family home with his salary. I can.
His plan was to remortgage, take half of the equity and get a mortgage on a small house with just his name. I presume I would change our current mortgage to just my name. I don't know if this is 'allowed' after a remortgage in both our names, or do I swap it to just me first?

Hadn't even considered credit. We don't have any outstanding loans or cards, we are fairly money savvy when things are 'normal'. We don't have savings either though, both in stable jobs with pensions. We are both late 30s.

I suppose this is a trial separation. I like the idea of having my own space and so does he, we don't know how this will work out.

justme111

A couple of thoughts: as it will be you staying with a child I guess your equity proportion usually would be far higher than 50%. Given that you earn more than him though I am not sure what final agreement would be fair.
See whether your mortgage provider allows you to remortgage on your own, chances are it may not (you will need to increase the size of your mortgage and remove partner's name from it -double whammy.). It may allow you to do this to a certain number and if so what you would offer your partner at this time would be limited to that number so your negotiations may be decided for you by a bank.

Fireflyaway

Seems a lot of hassle for a trial separation.I'd try something less permanent first. Also remember if you split and you take on the more expensive house that could be a lot of risk if you lost your job as the sole earner. For that reason i wouldnt remortgage as you might be stuck with it - technically financing your husbands departure. You will also need to agree on child maintenance and I don't know what your income is but maybe tax credits. Not being mean but if your husband can't afford much that's not your problem. If the priority is splitting up he can rent a room.