Divorce financial settlement

nxdmsandkaskdjaqd

I would appreciate some thoughts on the possible outcome of a divorce financial agreement, which is on behalf of a young family member. The key points are as below:

£600000 – Tenants in Common house purchase
£540000 – Estimated house value. Property value dropped due to new build and nearby developments.
£100000 – Deposit paid by husband
£500000 – Joint mortgage. Duration only 18 months
Married for just 18 months
No children
Both husband and wife working with £60k salaries.

The key question is how a financial settlement would be viewed based on the husband making the £100000 deposit (no contribution from the wife).

I hope this is right area to post this question.

mattpaint

How long have they been married? Surely no self respecting individual would want someone else's money?

nxdmsandkaskdjaqd

Married for just 18 months.

Socajam

Ask yourself this question and please answer it honestly. If your family member had put in £100000 deposit, do you think that the husband should be entitled to the 50/50 split which would include your family member honest deposit money?

What I find is with people is that when the shoe is on the other foot, well they were married X should be entitled to 50 of the deposit. But if X was the one that came up with the deposit, then they would raise hell on earth before giving 50% to Y.
Give the husband back his £100000 deposit and spit the balance 50/50.

Accountant_Kerry

what is seen as fair and what is law is different. Law is decided by the judge and the starting point will be 50/50 despite the length of the marriage, the argument that one party bought more into the marriage will have to be made and accepted by the judge and could go either way.

mark5

I thought under the less than 5 year rule the husband would get back whats left of his deposit.

Runningfast

I'm with the others on this one.

a relatively short marriage (18 months) and your family member has not contributed to the £100,000 deposit at all (if I am reading this correctly). They simply wouldn't have the house at all if it wasn't for her husbands ability to magic up the £100k.

Give the husband his £100k deposit back and split the rest. Taking part of the £100,000 is just morally wrong and says a lot about your family member if they believe they should have a stake in it.

hazyjo

Accountant_Kerry wrote: »

what is seen as fair and what is law is different. Law is decided by the judge and the starting point will be 50/50 despite the length of the marriage, the argument that one party bought more into the marriage will have to be made and accepted by the judge and could go either way.

Not usually the case.


They are usually put back to their original financial positions where possible. They'll obviously split losses, but they'll get near enough what they each put in.


Been there, done that. Married less than two years (twice).

nxdmsandkaskdjaqd

hazyjo wrote: »

Not usually the case.
They are usually put back to their original financial positions where possible. They'll obviously split losses, but they'll get near enough what they each put in.
Been there, done that. Married less than two years (twice).

Just looking for more information. Do you mind if ask if your financial positions were settled amicably or via solicitors?

Exodi

If I've interpreted this correctly, I think people are misled into believing there is a £100,000 to give back in the first place.

£600000 – Tenants in Common house purchase
£540000 – Estimated house value. Property value dropped due to new build and nearby developments.
£100000 – Deposit paid by husband
£500000 – Joint mortgage. Duration only 18 months
Married for just 18 months

I interpret that as meaning the house has a current market value of £540,000 but they originally purchased it for £600,000 with a £100,000 deposit and a £500,000 mortgage. Remember that at the start of a mortgage, mainly interest is offset by your mortgage payments,

Now the issues; the lender is likely to penalise for discharging the mortgage 'early'. Depending on the mortgage, there may be significant Early Repayment Charges for selling the house now which may be five figures. You then have the fact that selling the house will require valuations, estate agents, conveyancers, EPC, removal, etc.

I think they'll likely walk away with around £50,000 after the dust has settled which I think should almost certainly go entirely to the husband due to the significant loss he's incurred.

Courts are usually reasonable with 'short' marriages also, so I think this would be the stance if this went legal (which would be ridiculous because the leftover pot is already diminished).

I don't think the wife needs to twist the knife, the husband is already set to lose a significant chunk of his deposit here.

nxdmsandkaskdjaqd

Exodi wrote: »

If I've interpreted this correctly, I think people are misled into believing there is a £100,000 to give back in the first place.

Yes you are correct, the £100,000 deposit is going to be eroded with £60k loss of equity, £10k or selling expenses, had not thought about early payment of the mortgage.