Divorce consent order - future property settlement

Saborn

My wife and I are about to start the no-fault divorce process as it's an amicable split. We have two houses, one in my name and one in joint names and the rough plan is for her to take the house currently in my name and me to take the current family home.

However, she will need to take out a small mortgage for the outstanding debt on the other house. Considering interest rates and general economic uncertainty at the moment it's not a great time to be thinking about taking out a new mortgage. We thought it may be best to keep the current mortgage in my name which she makes payments for until it's completed.

We'll be using a solicitor to draw up the consent order when the time comes of course, but we're wondering what's actually possible within the bounds of this document. Could we, for example, have it stated in the consent order that I will sign the house over to her at the end of the current mortgage term rather than when the divorce is completed in X months?

I suppose in a broader sense I'm asking whether in the consent order is it possible to state that certain things happen years into the future rather than once the divorce is finalised? I'm hoping that as things like ongoing maintenance and child support payments are defined in the consent order that property ownership can be set in the future too.

Hope that actually makes sense! Thanks for any insights.

caprikid1

Trouble is you won't be able to transfer the house and not the mortgage so you will become her landlord effectively.

Personally if it's a small mortgage just get it done ? How much is it going to cost ?

Exodi

How long is the outstanding mortgage term?

As caprikid1 mentions, if we're talking about a difference in interest rate of 2-5% on a relatively, as you say, 'small mortgage' (perhaps of a few tens of thousands), then it hardly seems all of the messing about for a possible £20 a month saving.

Trying to put this into a legal agreement adds needless complexity to the situation and maintains a financial relationship between you both into the future.

Saborn

I think you're both right, thanks for your input. I think it's a classic case of overthinking the issue.

TBagpuss

You could have an order which said that the house would be transferred 'on or before' a specifc date and also that in the interim she would pay the mortgage BUT it creates further issues, especially if the delay is more than a couple of months 

You wouldn't be her landlord, it would likely be framed to provide that you hold on trust for her so you are the legal owner and she is the benficial owner. However, you woud need to make sure yu were quite clear about the CGT position, you would also need to bear in mind the downside for you of still having that mortgage in your name (it would be relvant to any new borrowing applications you might make) and it means that you an't resolve eveything at once, you have to go backan do further conveyancing work etc further down the line.

I'd look at the actual costs incolved but unless it's completely unworkable I'd suggest you aim to keep things simple. 

It would be a lot simpler to tranasfer it now and have a proper clean break if it is a small mortgage then even if the rates are 1-2% higher than on the current product to total extra is not likely to be huge.

And  of coruse it means that you are both free to move on - plus you don't need to worry about dealing with debt if she missed payments or was late .