Help splitting house equity.

Mrssarahr

Hi, I was hoping someone could give me some help in creating a calculation.  

Me and husband bought house in 2007 for 117500 deposit was put down 22500 (paid for by me) he put nowt down.  Leaving us with 95k over 25 years.  

I’ve overpaid over the years and managed to get it down to 31k we have been in the house 18 years.  

Well we have separated and I now have to buy him out.  As I have a poor paid min wage job I have only been allowed 32k to give him at the moment which he is happy about as he wanted to avoid paying stamp duty on a second property but he wants a % of the equity when/if the house sells (at this moment I have no intention in selling).

I have had to extend the mortgage 18 years to get the additional 32k.  

He has asked for 50% of the final sale of the house.  Whenever that will be but I don’t think this is fair as he will not have lived in the house for the whole term and he is getting the 32k and he didn’t pay any deposit.  I am having a total head fart in trying to work out an equation.  Any of you come up with anything. Knowing the background above? 

The bank valued the house at 148000 however this was a blanket valuation from other houses in the area - it needs work done to it and I will be spending money out my own pocket doing this.  I just am not sure what to counteract with.  

Peter999_2

Are you actually divorced yet?     If you are still married he will have to pay full stamp duty if he buys another house - as I have found out to my cost.

Brie

Not sure about the issue of what was the down payment or the payments throughout the relationship.

I do know that you need to look at what you both have now and come to an agreement about the split.

This will include the property, possibly 50/50.  It will also include any other assets, like savings accounts, ISAs and most significantly sometimes, what's in both of your pensions (personal or occupational).  Subtract from that what you owe.  So credit cards, overdraft, car loans, whatever.  

You might mitigate some of the assets going to him if you get a valuation sooner rather than later so get an EA to tell you what it's worth and get it in writing.  

Get a good solicitor - sounds like you will need it.

Mrssarahr

Peter999_2 said:

Are you actually divorced yet?     If you are still married he will have to pay full stamp duty if he buys another house - as I have found out to my cost.

Not divorced yet, not even filled in the paperwork.  He wanted some money up front there for asked for money to be given.  

Mrssarahr

Brie said:

Not sure about the issue of what was the down payment or the payments throughout the relationship.

I do know that you need to look at what you both have now and come to an agreement about the split.

This will include the property, possibly 50/50.  It will also include any other assets, like savings accounts, ISAs and most significantly sometimes, what's in both of your pensions (personal or occupational).  Subtract from that what you owe.  So credit cards, overdraft, car loans, whatever.  

You might mitigate some of the assets going to him if you get a valuation sooner rather than later so get an EA to tell you what it's worth and get it in writing.  

Get a good solicitor - sounds like you will need it.

He pas only paid into a pension 6 years ago.  I’ve paid one since I have 21 and have 60k in it.  He has about 10k - we already halted the savings and bank accounts.  (I did keep my redundancy payment as I was made redundant in May.  He did initially want half but then accepted this money was because I had to start again.  Which I have in a much lower paid role.  

He wants a gentleman’s agreement.  He doesn’t want to get solicitors involved.  

I was thinking of an equation like if I sell at 25 years then he gets 18 years % above what we paid minus the 32k released and minus the 22.5k deposit

I just don’t know how to make the calculation.

FlorayG

You can see a solicitor and not involve him. Considering your huge overinvestment compared to his, you need legal advice. You don't want to come to a private agreement, give him his share and then have him go to law saying what he got was not fair

user1977

Mrssarahr said:

Brie said:

Not sure about the issue of what was the down payment or the payments throughout the relationship.

I do know that you need to look at what you both have now and come to an agreement about the split.

This will include the property, possibly 50/50.  It will also include any other assets, like savings accounts, ISAs and most significantly sometimes, what's in both of your pensions (personal or occupational).  Subtract from that what you owe.  So credit cards, overdraft, car loans, whatever.  

You might mitigate some of the assets going to him if you get a valuation sooner rather than later so get an EA to tell you what it's worth and get it in writing.  

Get a good solicitor - sounds like you will need it.

He doesn’t want to get solicitors involved.  

Why not? Is he worried about what the result might be if you got proper advice?

sammyjammy

Mrssarahr said:

Brie said:

Not sure about the issue of what was the down payment or the payments throughout the relationship.

I do know that you need to look at what you both have now and come to an agreement about the split.

This will include the property, possibly 50/50.  It will also include any other assets, like savings accounts, ISAs and most significantly sometimes, what's in both of your pensions (personal or occupational).  Subtract from that what you owe.  So credit cards, overdraft, car loans, whatever.  

You might mitigate some of the assets going to him if you get a valuation sooner rather than later so get an EA to tell you what it's worth and get it in writing.  

Get a good solicitor - sounds like you will need it.

He pas only paid into a pension 6 years ago.  I’ve paid one since I have 21 and have 60k in it.  He has about 10k - we already halted the savings and bank accounts.  (I did keep my redundancy payment as I was made redundant in May.  He did initially want half but then accepted this money was because I had to start again.  Which I have in a much lower paid role.  

He wants a gentleman’s agreement.  He doesn’t want to get solicitors involved.  

I was thinking of an equation like if I sell at 25 years then he gets 18 years % above what we paid minus the 32k released and minus the 22.5k deposit

I just don’t know how to make the calculation.

You've been married for 17 years so the basis is 50/50 unless agreed otherwise, obviously if he has having an advance of 32k then its reason able to deduction that from his share but not the deposit, thats old news.  If he has to wait for you to give him the balance as you can't afford to remortgage then bluntly thats your problem not his, I'm sure he'd rather not have to wait for it.

ian1246

What % of your current house value does the £32,000 equate to?

That will be how much of his 50% of the share you'll have brought him out. You can then work out what the remaining % should be & with a decent conveyancing solicitor probably have him place a charge on the land registry to get that % of house sale price at the point of sale.

I.e. if £32,000 is equivalent to 20% of the house value currently, you'll have only brought him out by 20% - meaning he retains a 30% interest in the property.

Unfortunately, he's also entitled to half your pension (minus whatever the value of your half of his pension is) - given how expensive pension sharing orders are, I'd suggest factoring this into the house-split.

Whatever you both put in or paid out through the marriage is meaningless - you both own everything jointly and the starting point for a split is 50/50, varied only based on need.

Mrssarahr

user1977 said:

Mrssarahr said:

Brie said:

Not sure about the issue of what was the down payment or the payments throughout the relationship.

I do know that you need to look at what you both have now and come to an agreement about the split.

This will include the property, possibly 50/50.  It will also include any other assets, like savings accounts, ISAs and most significantly sometimes, what's in both of your pensions (personal or occupational).  Subtract from that what you owe.  So credit cards, overdraft, car loans, whatever.  

You might mitigate some of the assets going to him if you get a valuation sooner rather than later so get an EA to tell you what it's worth and get it in writing.  

Get a good solicitor - sounds like you will need it.

He doesn’t want to get solicitors involved.  

Why not? Is he worried about what the result might be if you got proper advice?

Won’t pay for one - his words not mine. 

Mrssarahr

ian1246 said:

What % of your current house value does the £32,000 equate to?

That will be how much of his 50% of the share you'll have brought him out. You can then work out what the remaining % should be & with a decent conveyancing solicitor probably have him place a charge on the land registry to get that % of house sale price at the point of sale.

I.e. if £32,000 is equivalent to 20% of the house value currently, you'll have only brought him out by 20% - meaning he retains a 30% interest in the property.

Unfortunately, he's also entitled to half your pension (minus whatever the value of your half of his pension is) - given how expensive pension sharing orders are, I'd suggest factoring this into the house-split.

Whatever you both put in or paid out through the marriage is meaningless - you both own everything jointly and the starting point for a split is 50/50, varied only based on need.

I will get it valued properly.  As the bank just valued it against other houses in the area.  I will speak to the estate agents and get someone to come.  See what they think then workout what the difference is.  He is in the process of signing the deeds over to me.  I don’t want him to be out of pocket by this I just don’t want to own the house another 18 years and still him get a share of a profit (if any) that he hasn’t paid towards if that makes sense - who knows what it’s going to be worth then. I think it should be based on the value of the property when he moves out.  Geez we may have  another crash and then I need to make sure me and my kids are protected to live there - 32k is half of what we put in so far.  (What he initially asked for) but it turned out that’s all the bank would actually give me anyways.