Separation Advice

day_dream_believer

Hi

I am looking for some advice on what to do with my house after a recent separation.
My wife & I have decided that our relationship isn't working so we are going to separate.
We live in a house we only bought just over a year ago with our 2 children. My wife simply cannot afford to pay the mortgage on her own as she works part-time, earning less than the mortgage payments. She has hinted she would be wanting me to pay the mortgage in full when I move out. I cannot afford to do that as well as rent a place of my own. I would also be looking to buy again in future so would need to remove my name from existing mortgage. I would like to keep the house in my name and would be prepared to offer her the savings she put into the deposit to buy her out of the house. That could be used towards kitting out a new house she would need to get from the council as she cannot afford to rent. Can anyone offer any advice on what options are available to me?

Thanks
D

Caz3121

day_dream_believer wrote: »

We live in a house we only bought just over a year ago with our 2 children. My wife simply cannot afford to pay the mortgage on her own as she works part-time, earning less than the mortgage payments. She has hinted she would be wanting me to pay the mortgage in full when I move out. I cannot afford to do that as well as rent a place of my own. I would also be looking to buy again in future so would need to remove my name from existing mortgage. I would like to keep the house in my name and would be prepared to offer her the savings she put into the deposit to buy her out of the house. That could be used towards kitting out a new house she would need to get from the council as she cannot afford to rent. Can anyone offer any advice on what options are available to me?

I assume you mean that your wife could not take a new mortgage due to income and not that she could not afford to make the monthly payments. In addition to her part time income, your wife will likely have working and child tax credits as well as maintenance from you.
How does the mortgage amount compare to the amount you would be required to pay in maintenance?
Does your local council have a glut of empty properties? waitlists can be many years long with possibly b&b or temp housing offered. Why do you say she could not afford to rent privately...she would likely qualify for help through housing benefit unless she had savings over £16k (reductions if over £6k)

mrsjanebanbury2009

If the seperation is amicable, I suggest you contact a soilcitor who can provide a mediation service for you to attend together. This will allow you to come to a financial agreement that suits both of you, and that will be allowed by a judge. (I have fairly recently been through this myself). What I can tell you is that what you will find you need to do is add up all of both your assets (savings, salary, pensions, shares, inheritance etc) then divide them up in such a way that you both have an equal amount available to you, whether that is to rent or buy.

FBaby

That could be used towards kitting out a new house she would need to get from the council as she cannot afford to rent

It doesn't really work like that though. The waiting list can be long, she could end up in a property in an undesirable area or away from your kids' school if they go already.

gonzo127

you have pretty much covered most of them

Her stay in the house - she needs to check the benefits + child maintenance from you, she would be entitled to since that is likely to top up her wage considerably.

you will need to explain your financial situation to her in that you are unlikely to be able to afford to pay any towards the upkeep of the house due to the costs of living yourself in rented, if you can get some numbers together for rental to show her what you need to live that would probably help.

if this is an option i would suggest you try to agree a time limit on her buying you out of the house, and agree the % of the house which would be yours upon her selling it, and make it a % of the house not the equity, since you would get any growth/reduction in house price, but not in the equity that she has built up by paying off the mortgage on her own.

you stay in the house and her move out - make sure you can actually afford this as well, taking the maintenance you will pay for the children out of your outgoings etc,

you will also need to check that the council will actually house her since there could be rules around being made 'homeless' when she is actually on the mortgage of a house etc, do not assume this will be a possibility. also they might take into account the 'savings' she would have from the you buying her out of the house, which might make it impossible for her to get a house


sell the house and both move - simple in a lot of ways, 'nice' clean break in which neither stays in the house and both can make fresh starts, the main issue will be agreeing the split of the equity of the house, but as you have only been moved in a year, then it should be simple in that each gets their deposit contributions back, and 50:50 any further growth in equity (for example) only issue comes back to if your 'ex' wife can get her own place taking into account the savings she would have from the sale of the house

jamiehelsinki

A starting point would be 20% of your total pay after pension contributions but before tax and NI for child maintenance for 2 children but this reduces if you have the children over night regularly etc.

Unless your a big earner you will probably struggle to pay more after your living costs etc, generally you will both be worse off financially after a split she needs to understand this.

Is there much equity in the house?

Sarastro

I don't think you've any alternative to selling the house.

day_dream_believer

The mortgage is more than double what I would be paying in maintenance. Private renting in our area is going to be more expensive than we're paying for our mortgage. I am happy to walk away and leave the house to her and the kids however, I am virtually certain she won' qualify for the mortgage on her own - I assume the banks don't take tax credits or child support into account? We both have no savings left after buying the house.

day_dream_believer

jamiehelsinki wrote: »

A starting point would be 20% of your total pay after pension contributions but before tax and NI for child maintenance for 2 children but this reduces if you have the children over night regularly etc.

Unless your a big earner you will probably struggle to pay more after your living costs etc, generally you will both be worse off financially after a split she needs to understand this.

Is there much equity in the house?

I am well aware we'll be worse off. She seems to think she'll be rolling in it.
I doubt there will be any equity in the house. The housing market is not what it was when we bought it so I think we'd get around what we paid, maybe a little more but that would all get used on fees if we sold.

gonzo127

day_dream_believer wrote: »

The mortgage is more than double what I would be paying in maintenance. Private renting in our area is going to be more expensive than we're paying for our mortgage. I am happy to walk away and leave the house to her and the kids however, I am virtually certain she won' qualify for the mortgage on her own - I assume the banks don't take tax credits or child support into account? We both have no savings left after buying the house.

i do not mean this to be rude, but you seem to be assuming a lot in this post or at least jumbling things up, try to break things down as that can help

the mortgage being double the child maintenance doesnt really have much to do with anything, the main thing is could you afford BOTH, plus bills, plus food, plus travelling to and from work, plus etc etc look at doing a statement of affairs, on the debt free wannbe forum on this site it has a couple of very good links to SOA's, which you can fill in with dummy numbers to get a feel of how things will look.

a lot of banks DO take into account child maintenance AND tax credits into account on mortgage applications so it is possible she could get a mortgage, but the question is could she get a mortgage AND buy you out? or would you be expected to stay on the deeds with a type of trust set up for when she sells that you would get a certain amount of money out of the house etc.

as to renting being more than the mortgage, that is very possible, but why not check? pop on rightmove and look at the rentals in your area and SEE how much they cost.

just try and pin some numbers down instead of ifs buts and maybe's, as it will help you plan and start to figure things out

System

day_dream_believer wrote: »

Hi

I am looking for some advice on what to do with my house after a recent separation.
My wife & I have decided that our relationship isn't working so we are going to separate.
We live in a house we only bought just over a year ago with our 2 children. My wife simply cannot afford to pay the mortgage on her own as she works part-time, earning less than the mortgage payments. She has hinted she would be wanting me to pay the mortgage in full when I move out. I cannot afford to do that as well as rent a place of my own. I would also be looking to buy again in future so would need to remove my name from existing mortgage. I would like to keep the house in my name and would be prepared to offer her the savings she put into the deposit to buy her out of the house. That could be used towards kitting out a new house she would need to get from the council as she cannot afford to rent. Can anyone offer any advice on what options are available to me?

Thanks
D

What you should do is pay what you are supposed to according to maintenance guidelines. Anymore and you may create a rod for your own back until the judge decides.