Selling to my Wife.......

HeelanCoo007

Hi all, bit of a strange one here. 
Me and my wife have been married for about 6 years and she's just landed the bombshell she wants to seperate. This has ripped my world apart but we are looking to do this on the absolute best terms possible. We will be Co ha biting for as long as possible as we can't live seperate ly for various reason. 

The issue is, the house and mortgage is in my name, we have a decent bit of equity in the house and the absolute best case scenario is that she can buy the house from me so nothing changes for our daughter.

The problem is we both have debt and likely wouldn't get a mortgage untill that was sorted, but we don't want to sell the house so......if I was to sell to her would we be able to use the equity that's currently only in my name for her to pay of debts and use some for the deposit for her new mortgage on this house? 

There should be enough to cover our debts and for her to be able to put down enough of a deposit. I just really need to keep my daughter in this house and I am not sure of the best way to do this.

We're in Scotland by the way, not sure if it's different north and south

Herzlos

Would she be able to get a mortgage for the house value, factoring in the equity?

Say you've got a house worth £100k with £20k equity, she'd need to buy the house from you for £100k and you'd keep the £20k do with what you want.

I don't think there's any way you could use any of that £20k to fund the deposit because it'd need to be provided before the sale. Or to use the £20k to pay off debt to aid affordability for the same reasons.

You may be able to remortgage and free up some cash to then give to her, but you'd need to do that before selling so would need to be careful you don't get caught with early repayment charges. Or potentially you could get a loan to clear her debts and provide a deposit, paid off when the house sells, but you run a risk of being completely screwed if she does something else with the money as it'd need to be a gift with no conditions attached.

As crap as it sounds, can you get away with downsizing a bit to free up the money?

Albermarle

Normally when a couple separate/divorce? a legal document is drawn up by solicitors, that defines 'who gets what' . Everything is thrown in the pot , house, mortgage, debts, savings, pensions, cars etc and then shared out in an agreed way . Plus ongoing support for children .

It is not nice, but in the long run normally a better solution than ad hoc agreements like the one you are proposing. The reason for this is that it is a final agreement, whereas what you are proposing is only a temporary and for sure there will be further issues/disagreements further down the line, maybe for years to come. Especially if new partners come on the scene ( maybe with their own houses/children etc ) .

HeelanCoo007

Herzlos said:

Would she be able to get a mortgage for the house value, factoring in the equity?

Say you've got a house worth £100k with £20k equity, she'd need to buy the house from you for £100k and you'd keep the £20k do with what you want.

I don't think there's any way you could use any of that £20k to fund the deposit because it'd need to be provided before the sale. Or to use the £20k to pay off debt to aid affordability for the same reasons.

You may be able to remortgage and free up some cash to then give to her, but you'd need to do that before selling so would need to be careful you don't get caught with early repayment charges. Or potentially you could get a loan to clear her debts and provide a deposit, paid off when the house sells, but you run a risk of being completely screwed if she does something else with the money as it'd need to be a gift with no conditions attached.

As crap as it sounds, can you get away with downsizing a bit to free up the money?

I don't think either of us can get a mortgage or even me remortgage die to our current debts etc. We are fine when together and pay everything each month but on our own we can't afford it. 
So honestly we have enough to split the equity pay the debts and start again. I would happily give her the house for the sake of our daughter.
We potentially have 40-60k in equity depending on valuation. Ideally she could use half to pay debts and then deposit. It's such a mess, I want just want to clear my debts then leave them with the house. I genuinely don't care about what comes after. 

HeelanCoo007

Albermarle said:

Normally when a couple separate/divorce? a legal document is drawn up by solicitors, that defines 'who gets what' . Everything is thrown in the pot , house, mortgage, debts, savings, pensions, cars etc and then shared out in an agreed way . Plus ongoing support for children .

It is not nice, but in the long run normally a better solution than ad hoc agreements like the one you are proposing. The reason for this is that it is a final agreement, whereas what you are proposing is only a temporary and for sure there will be further issues/disagreements further down the line, maybe for years to come. Especially if new partners come on the scene ( maybe with their own houses/children etc ) .

I understand but I can't really forsee any issues down the line, we will both have had our equity out the house. If she kept it and got a new partner etc it wouldn't affect me as I'd have had my money. 
I just need to keep my daughter in this house somehow, I can't bear the thought of her house and her room being in the Internet for people to see and potentially take from her. Would kill me. 

I have heard of a seperation agreement, where I can say she is entitled to half and hopefully a bank or a lender would accept that as a desposit, then once she bought the house from me it would then be entirely hers. Whatever comes in future doesn't matter. I would have had my money, she buys the house, my daughter stays in her room and I downsize and start again. I don't care about me, I'll figure it out, my daughter needs to stay in this house

DullGreyGuy

Any reason why 50% of the house isn't hers? Assuming you were together when it was acquired it is the assumed starting position of pretty much everything irrespective whose names are on forms etc. Parties can decide to divide things how they want but in most cases I've seen at some point someone speaks to a friend who points out they're being taken for a ride and they should speak to a lawyer and everything is then back to square one and reopened. 

user1977

As above, whose name the matrimonial home is registered under isn't particularly relevant, it's divided between you depending on your contributions. So you may be starting from the wrong point.

Newcomer1234

At that the moment you are on good terms and putting your daughters needs first…….but….things change. If your wife gets a new partner and then your daughter wants to be with you instead…..will you be able to manage that? It happens, new partners don’t always welcome step children. Please consider alternative scenarios, don’t just assume things will all go to your plan.

BobT36

HeelanCoo007 said:

Albermarle said:

Normally when a couple separate/divorce? a legal document is drawn up by solicitors, that defines 'who gets what' . Everything is thrown in the pot , house, mortgage, debts, savings, pensions, cars etc and then shared out in an agreed way . Plus ongoing support for children .

It is not nice, but in the long run normally a better solution than ad hoc agreements like the one you are proposing. The reason for this is that it is a final agreement, whereas what you are proposing is only a temporary and for sure there will be further issues/disagreements further down the line, maybe for years to come. Especially if new partners come on the scene ( maybe with their own houses/children etc ) .

I understand but I can't really forsee any issues down the line, we will both have had our equity out the house. If she kept it and got a new partner etc it wouldn't affect me as I'd have had my money. 
I just need to keep my daughter in this house somehow, I can't bear the thought of her house and her room being in the Internet for people to see and potentially take from her. Would kill me. 

I have heard of a seperation agreement, where I can say she is entitled to half and hopefully a bank or a lender would accept that as a desposit, then once she bought the house from me it would then be entirely hers. Whatever comes in future doesn't matter. I would have had my money, she buys the house, my daughter stays in her room and I downsize and start again. I don't care about me, I'll figure it out, my daughter needs to stay in this house

If the house is YOURS (though as others mentioned, it might not be so simple depending on when you acquired it), then why not continue living there yourself, your daughter live with you, and have the wife move out?

Hoenir

Find yourself a Family Law Solicitor.  There'll be best placed to provide you with guidance and advice. More than likely your wife will do likewise.  As untangling the financial relationship and agreeing upon a split of assets. Can be fraught with disagreements. 

user1977

BobT36 said:

HeelanCoo007 said:

Albermarle said:

Normally when a couple separate/divorce? a legal document is drawn up by solicitors, that defines 'who gets what' . Everything is thrown in the pot , house, mortgage, debts, savings, pensions, cars etc and then shared out in an agreed way . Plus ongoing support for children .

It is not nice, but in the long run normally a better solution than ad hoc agreements like the one you are proposing. The reason for this is that it is a final agreement, whereas what you are proposing is only a temporary and for sure there will be further issues/disagreements further down the line, maybe for years to come. Especially if new partners come on the scene ( maybe with their own houses/children etc ) .

I understand but I can't really forsee any issues down the line, we will both have had our equity out the house. If she kept it and got a new partner etc it wouldn't affect me as I'd have had my money. 
I just need to keep my daughter in this house somehow, I can't bear the thought of her house and her room being in the Internet for people to see and potentially take from her. Would kill me. 

I have heard of a seperation agreement, where I can say she is entitled to half and hopefully a bank or a lender would accept that as a desposit, then once she bought the house from me it would then be entirely hers. Whatever comes in future doesn't matter. I would have had my money, she buys the house, my daughter stays in her room and I downsize and start again. I don't care about me, I'll figure it out, my daughter needs to stay in this house

If the house is YOURS (though as others mentioned, it might not be so simple depending on when you acquired it), then why not continue living there yourself, your daughter live with you, and have the wife move out?

Because the OP can't "have the wife move out" of the matrimonial home (well, not unless she actually wants to or a court decides she should).