Help splitting house equity.

saajan_12

Mrssarahr said:

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 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. 

Yes, provided you pay that half of current equity over now. If not and the money continues to be tied up in the property, then he's losing interest or other gains on that % equity. That's not to say he should get the equity gained by you paying down the mortgage over that time, but just anything coming from property value increases. 

Mrssarahr said:

 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.  

what you've put in as in as in paying down capital, or the entire mortgage payments? If the latter then its a bit silly, as he's also lived there in that time, which is why the interest was incurred. 

I'd look at the current value less the current mortgage balance, and that's your equity. Debatable whether you factor in the deposit contribution, other savings, pensions, debts, etc at their current value. That net number gets divided in half, and each person's 'share' crystallised at that point. If 32k covers his share then great. If not, then take whatever is left as a % of the current house value, and that's the % he gets back when you sell - that way if there is appreciation in the value then he gets some return on having his money tied up, but not 50% of your future mortgage payments. 

ian1246

Mrssarahr said:

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.  

I m afraid that's not how it works. You can either buy his share (50%) out now, or what you don't buy he retains in the house as a % of value. You should count your blessings he's not (yet) got a solicitor involved - since they will be pushing for his % of your pension to be offset by a larger share in the house.

If the houses increases in value before you sell & he owns a %, so be it - because ultimately, at this point in time - you can't buy him out completely so his share remains. Doesn't matter if your paying the mortgage - your benefitting from the houses day to day use, whilst his shares locked away and inaccessible (that's what a solicitor will argue to the judge).

You also need to brace yourself since if your house was worth £112,000 in 2007 it's likely worth £300,000+ now!!! That £32,000 will be peanuts and might mean you've only brought him out of as little as 10%!!!

You also need to be prepared to consider the possibility your going to have to sell now - if this gets to court, the judge will look at each parties needs & their ability to support themselves moving forward. Is the house in anyway "excessive" I.e. more bedrooms than needed, detached (vs. Semi-detached or terraced) - because if it is, there will be an expectation that you could sell the marital home and downgrade, in order to split the share of equity & have a clean break.

Who are the children living with? It's the modern age, the burden shouldn't just fall on Mum - will he push to have them 50/50 or even be the main carer? If 50/50 (both for day to day activities & nights staying) there is no CMS obligation. Remember - nothing in law saying you have any more rights than him to the kids... so worth just having a think about potential "what if's" to be prepared.

On the flip side - is there a huge income gap between you? Spousal maintainence could apply if so & in such scenario's, often the solicitors will advise the higher earner "buys" the lower earner out of spousal maintaince, via giving a greater share of equity. But this generally only applies where there is a huge gap in income & the kids are at school (limiting the one parents ability to work & support themselves).

Mrssarahr

ian1246 said:

Mrssarahr said:

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.  

I m afraid that's not how it works. You can either buy his share (50%) out now, or what you don't buy he retains in the house as a % of value. You should count your blessings he's not (yet) got a solicitor involved - since they will be pushing for his % of your pension to be offset by a larger share in the house.

If the houses increases in value before you sell & he owns a %, so be it - because ultimately, at this point in time - you can't buy him out completely so his share remains. Doesn't matter if your paying the mortgage - your benefitting from the houses day to day use, whilst his shares locked away and inaccessible (that's what a solicitor will argue to the judge).

You also need to brace yourself since if your house was worth £112,000 in 2007 it's likely worth £300,000+ now!!! That £32,000 will be peanuts and might mean you've only brought him out of as little as 10%!!!

You also need to be prepared to consider the possibility your going to have to sell now - if this gets to court, the judge will look at each parties needs & their ability to support themselves moving forward. Is the house in anyway "excessive" I.e. more bedrooms than needed, detached (vs. Semi-detached or terraced) - because if it is, there will be an expectation that you could sell the marital home and downgrade, in order to split the share of equity & have a clean break.

Who are the children living with? It's the modern age, the burden shouldn't just fall on Mum - will he push to have them 50/50 or even be the main carer? If 50/50 (both for day to day activities & nights staying) there is no CMS obligation. Remember - nothing in law saying you have any more rights than him to the kids... so worth just having a think about potential "what if's" to be prepared.

On the flip side - is there a huge income gap between you? Spousal maintainence could apply if so & in such scenario's, often the solicitors will advise the higher earner "buys" the lower earner out of spousal maintaince, via giving a greater share of equity. But this generally only applies where there is a huge gap in income & the kids are at school (limiting the one parents ability to work & support themselves).

Thanks very much - we bought the house about 6 months before the crash and lost thousands off the price it’s moved up as everyone’s has but we paid top end.  The area is a bag of !!!!!! too.  The estate agent suggested a price of 135/140 so even if I went for the top end that’s 22500 profit.  Half of that would only be 11250.  I could probably source that from family.  And come up with a payment to completely sever the tie and do clean break.  

He is on 35k I’m on 24k as I had to start again entry level with being made redundant.  I am not interested in maintenance as I work shifts - custody will be equal and fair:  we said we would just half children’s costs.  Clubs,clothing etc. 

I have always been the one who saved.  He spent his money on weed - maybe should have done that and I would have come out of it better 🤣. Thanks for the info it’s very helpful.  I did mention the stamp duty to him and he thinks I am lying.  🤷‍♀️ was it you who mentions you were billed it?  

RAS

Please look at the wikivorce website.

Even if he wants shared care to prevent you getting CMS, if your income is less, which partially offset your larger pensions as he has higher earnings capacity.

You really do need at least one session with a good lawyer. And to suggest he pays for mediation.

user1977

Mrssarahr said:

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. 

Whether he has a solicitor has got nothing to do with whether you get advice from one.

No19v87

Are you parting on reasonable terms? It sounds relatively amicable.

If so, might be worth coming to an agreement and getting it all drawn up and tied down sooner rather than later.

If you worked on the £140k valuation:
£140k valuation - £31k mortgage outstanding = £109k
£32k is just over 29% of the equity. 

You could get a charge applied so he retains the right to 21% of any future sale. You’re likely to lose out in this scenario though as the value of houses is only going to go one way long term.

The difference with the £135k lower valuation is about 2% more at just under 31% and then a 19% future share.

If you went this way, the lower the valuation the better, for you.

That said, it sounds like you have more money, savings, pensions etc. so he’s actually probably entitled to more.

You could get a clause to be able to ‘buy-out’ his 21% future share in the event you could afford to do so. Keeps options open to settle things sooner if your circumstances change.

In any event, he might not want a solicitor but I’d encourage you to see one. Even if it’s just to get everything formally drawn up to prevent him changing his mind at a later date.

ian1246

You absolutely need a financial consent order - otherwise your never legally separated financially and he'll have a claim on any future assets you have (& you on him).

diggingdude

Be sure you can sell the house in the future without his consent. There may be a charge on the property but that's the only control you want to give away 

Momanns

Even if you share custody you may still be entitled to child maintenance payments - check the calculator

If you haven't even started the ball rolling, divorce can take a long time at the moment with a) having to agree financial terms and b) cooling off periods. 

There is mediation and you may be able to get a voucher to cover the costs of this process so definitely worth taking some professional advice before you do anything.