Charge on house

ldp

Hi advise needed please! I own a 5 bed hse outright with a 38.75% charge in 9 years time due to divorce with children. I would like to downsize now rather than wait 9 years as I’m 45 on a low income so need to get a mortgage now rather than wait. I’ve offered my ex husband 30% now as it’s all I can afford & it's only been 3 years so he’s getting his money 9 years early but he said he’d rather wait for full amount. If I downsize; where can I invest the rest of the money without it affecting my tax credits as it’s technically not mine to spend? It will go straight to him in 9 years & hopefully have made some so I don’t have to sell the 2nd hse incase my kids ever need to come home. 

Thanks 

Angela_D_3

as as long as you stay on tax credits you are fine.  If anything changes and you end up on universal credits with money in the bank you’re doomed 

ldp

Thank you; I was under the impression you can have 6k savings with tax credits before they start deducting? What happens with universal then? 

Also I’m sure I’ve heard Martin Lewis say you can put money by for a property but not sure if I can under these circumstances?

Secretsusie

There's no capital limits for tax credits.  If you moved to universal credit, capital effects that on balances over 6k 

AdrianC

You won't be able to sell the property without the charge being removed.
The charge won't be removed unless he agrees.
If he agrees, he loses his security over the debt.

Will he agree to remove the charge for 30% now with a promise of the rest in 9 years time?

How much is the 8.75%?

To go from 30% to 38.75% in 9 years would require your investment to show a return around 3% after tax. It's not impossible, but you aren't going to get it without some risk to your capital.

saajan_12

ldp said:

Hi advise needed please! I own a 5 bed hse outright with a 38.75% charge in 9 years time due to divorce with children. I would like to downsize now rather than wait 9 years as I’m 45 on a low income so need to get a mortgage now rather than wait. I’ve offered my ex husband 30% now as it’s all I can afford & it's only been 3 years so he’s getting his money 9 years early but he said he’d rather wait for full amount. If I downsize; where can I invest the rest of the money without it affecting my tax credits as it’s technically not mine to spend? It will go straight to him in 9 years & hopefully have made some so I don’t have to sell the 2nd hse incase my kids ever need to come home. 

Thanks 

Remember your house price can increase too. In cash terms, an investment returning 3% annually 30% would grow 30% cash into 39% of the current property value. However if your house increases in value too, so will the value of the charge so you'd need an investment that returns 3% over the house price increase. 


Apologies don't know about the tax credits side.