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'The fairest way to split a house on separation' blog discussion

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'The fairest way to split a house on separation' blog discussion

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This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.



Please click 'post reply' to discuss below.
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  • silvercarsilvercar Forumite, Board Guide
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    There are many many threads on the housing board where people have come up against this problem.

    Imagine that the property was bought on a 125% mortgage or has dropped in value. Then your profit becomes a loss and how to divide up the loss becomes more difficult. Often there is not enough money left to clear the mortgage and repay the deposit to the one that provided it.

    Sometimes there is even negative equity and the partners can't sell unless they can find more money. Then one wants to buy the other out and want a payment for taking over the others liability.

    Agreeing when a sale should happen is just as important as deciding how to split the proceeds.
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  • i paid £140,000 depost, other half had £50,000- i pay 2/3 of mortgage, he pays 1/3... If we split we have our deposits back and split the profit ie 2/3 to me and 1/3 to him. We have no children, we keep other money seperate as i earn more!
    We have signed deed of trust to this effect.
  • I have worked most of my married life yet i have also been unable to work full time due to having children which we both wanted adn that i provided the child care for whilst he worked... how would you say that would affect the split since obviously I have not been able to put as much money in but i also provided free child care... and i am now left with the children and no house
  • Your methods listed don't take into account those people who have not contributed to the mortgage but take care of other things like providing the food etc.... I have not put a penny into my husband's house in mortgage payments but have contributed with grocery shopping etc. After 10 years of marriage are you saying I shouldn't be entitled to any money from the house? How could I then afford to start over again?

    Fortunately I deeply love my husband and have no intention of going anywhere but wanted to make my point.
  • My X husband bought the house and paid the mortgage, I gave up my job to move to his part of the country and then ran the house - helped him in his business and gave birth to and cared for his 3 children- I had no income only contributed a rental from my house then the (smal amount) of capital raised when it was sold.
    When we parted we split it 50/50 - although his "financial contribution" was much bigger, my contribution was my support and childcare, this allowed him to earn and pay the mortgage. .... Is one worth more???
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  • FrogletinaFrogletina Forumite
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    When I bought a house with my partner, I paid a deposit equal to 3/10 of the purchase price but he had no money for a deposit. I paid the mortgage on the remaining 2/10 of my share and completely paid off my half of the mortgage within a few years, and he continued to pay the mortgage for his half of the house.

    When we split - the house was valued and I paid off the remaining mortgage and gave him cash to the value of 50% of the house less the remaining mortgage. Had we tried to sell the house, we would not have got the valuation price, especially when I put it up for sale later and found it had subsidence!

    Was this the fairest way? I have often wondered. It seemed to be, he had no worries over it - we both worked and split all bills other than this 50/50.
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  • Jen151Jen151 Forumite
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    We bought our flat for £90,200 in 2007. Its now worth maybe £95,000 - if we're lucky, maybe more like £91,000. For a deposit I put in £8k of my money, and we borrowed £10k loan of parents money.

    All the mortgage payments have been equally split between us over the duration of living here & we both earn around the same wage

    We want to sell the flat, buy a new house, give my parents back there money. I have no idea how the money side of this will work though, especially if we lose money on the flat? Any advice would be welcome!
    ~ Team Sticky ~
  • HappyMJHappyMJ Forumite
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    What would most probably happen is the solicitor gets most of it. If this were to apply to me then I would give Jen her £40,000 deposit back and split the rest 50/50. So Jen gets £70,000 and Phil gets £30,000. That to me would be quite fair and takes into account any period of time that one of the partners can't work and therefore is not penalized by that.
    :footie:
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  • edited 17 January 2011 at 7:57PM
    Gorgeous_GeorgeGorgeous_George Forumite
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    edited 17 January 2011 at 7:57PM
    Whatever sum you come up with, it only works if both parties agree. If one party feels hard done by there may be no sale as both signatures are required. If the disgruntled party doesn't care about his/her credit score, they could have little interest in avoiding repossession.

    The best thing is to stay single :) but negotiation is the key if a couple splits. What I don't understand is the number of people who cannot commit to marriage but readily sign a JOINT mortgage for a huge sum of money.

    GG
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  • jamesdjamesd Forumite
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    You could usefully start by doing a net present value calculation for the streams of payments involved. That would equalise the deposit and ongoing payment contribution types and get something closer to the split of money invested. Then your proportionate split comes closer to reflecting the investment that each has chosen to make in the property.

    I'm ignoring divorce splitting and other potential spousal relationship issues. Also ignoring differing opportunity costs for those who would have invested the money compared to those who would spend it or stick it in a savings account if they weren't using it for this purpose.
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