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Haven't a scooby how to divide equity on our house

(40 Posts)
NightOfTheCactus Thu 11-Jul-13 12:56:11

Getting divorced. We need to sell the house as I won't be able to pay the mortgage on my own. I have mental health problems which has stopped me working for a few years, and I am going onto ESA now we're separated - but even if I was working, I've never earned enough money to pay the mortgage on my own.

When we bought the house initially, my parents gave me a gift of £50K which covered our deposit. Since then, my husband has paid roughly £40K on the mortgage over the 6 years we have lived here (but most of that has been interest, only £9K of the mortgage itself has been paid off). Also because I've been a SAHM and have been unwell, he has been paying all the bills etc too.

We're putting the house on the market soon sad . My STBXH feels that we should be splitting the equity 50/50.

I have other people saying to me that I'd be a soft touch if I agreed to that and I shouldn't be selling myself short, especially as he is able to work at the moment and I'm not, and that even though I wasn't paying bills over the last few years, I was here to do childcare and thus facilitating him to work, and we wouldn't have got the house in the first place if it were not for my parents' gift.

I'm feeling a bit torn, because I don't know what is fair and reasonable to ask/expect. I had a couple of free half hours with Solicitors. The first I saw was basically trying to flog their "package" and doing a hard sell, but I couldn't get any decent information out of her. The other Solicitor pretty much said that I seem very organised and should sort out the divorce myself as the house is the only asset. She wasn't able to give me advice either.

Is it solicitors who should give advice on this, or should I be asking elsewhere or guessing and trying my luck?

I don't want to be a dickhead about the house and I don't want to be unfair to my husband or rip him off, even though he's not exactly my friend.

Anyone able to give me information or able to point me in the direction of somewhere that I could get sensible advice. My parents have offered to pay for me to have an hour with a solicitor because they are concerned about me throwing money away in the long term (and I'm going to need to live off this money, cos once the equity is released, my benefits will stop) but I don't want to waste money if a solicitor isn't the person to advise me on this.

Thanks for your help.

chickensaladagain Thu 11-Jul-13 12:58:21

Who will the children live with?

NightOfTheCactus Thu 11-Jul-13 13:01:35

DD will live with me

NightOfTheCactus Thu 11-Jul-13 13:03:45

Well - I say live with me - she'll stay with her Dad too. At the moment he's staying at a friends' house so it's not appropriate for her to do overnight with him - but I will be the main carer

RambleOn Thu 11-Jul-13 13:07:44

Are you sure yr benefits will stop once equity is released? If its used to pay towards your residence, it's treated as 'notional capital' and is ignored.

DuelingFanjo Thu 11-Jul-13 13:11:09

Work out what percentage of the original cost of the house the 50K was

that's your share which you take out of the equity.

then either split the rest between you.

or if you want to be generous to him negotiate a split based upon what you think your contributions have been (Yours being the cost of childcare).

so - say your house cost you £250000 and you paid a deposit of £50K that is 20%. You get your house valued and take out your 20% (from the equity) then split what remains between you. So you get 60% and he gets 40% for example.

DuelingFanjo Thu 11-Jul-13 13:13:01

because if your house value has increased it should be taken into account that without your deposit there wouldn't have been a house to sell in the first place and your contribution (Childcare) may not be 'paying the mortgage' but it has enabled him to go out to work.

NightOfTheCactus Thu 11-Jul-13 13:13:59

Well, at the moment my husband is still paying the mortgage - he says he will pay it until the house is sold. The only benefit that I've (recently) claimed is ESA for general living expenses. I haven't claimed any housing benefit - but the'd only pay out share of the interest if I did anyway I gather. There is roughly £59K equity in our house because of the deposit my parents paid, so if we were to split that 50/50 I would then have money over the £16K threshold and benefits won't pay any money if I have more than £16K in savings

NightOfTheCactus Thu 11-Jul-13 13:16:13

We bought the house for £160K, so got a mortgage for £110 from the building society as my parents paid a £50K deposit. Since my husband and I were married at the time, would he not be entitled to some of that £50K?

RambleOn Thu 11-Jul-13 13:17:10

They will ignore the money if its put straight into another house though.

NightOfTheCactus Thu 11-Jul-13 13:17:31

(Building Soc say equity in our house is about £59K - which I guess includes the amount we paid in deposit - we're getting the house valued tomorrow so I guess I'll have a more concrete idea then...)

NightOfTheCactus Thu 11-Jul-13 13:18:30

Ramble On - I won't be able to get a mortgage anywhere else as I'm not working at the moment - so I'm going to have to rent (which is a bit like flushing the money down the toilet, but can't see another option) sad

RambleOn Thu 11-Jul-13 13:19:05

He's probably legally entitled, but not morally in my opinion.

RambleOn Thu 11-Jul-13 13:21:02

How much do flats cost round your way? It seems a shame to spend money given by your parents as a means to see you securely housed.

NightOfTheCactus Thu 11-Jul-13 13:26:13

I certainly won't have enough money to buy a flat outright - and I won't be given a mortgage cos I haven't any money coming in.

I feel sick about getting rid of the house and having to rent, because renting a place much smaller than this will cost about £100 per month more than living here does - and I feel bad for my parents because it's making them feel pretty cheated - especially as they are very angry with my STBXH as it's dawned on them how awful my marriage has been and because I've been ill and he's been plausible they didn't really see what was going

NightOfTheCactus Thu 11-Jul-13 13:27:23

(don't want to make the divorce any more adversarial than necessary though, because DD adores her dad and I want to keep relations as good as possible for her sake really)

DuelingFanjo Thu 11-Jul-13 13:39:08

It sounds like your house may have dropped in value, or at least not made anything in the last 6 years? I think in this case you could take the 30K (ish) which would be half of it, may work out nearer £25K each if you have to pay fees or take a drop on the house valuation to sell it.

It sounds really unfair that out of the 50K your parents gave you, you only get half of it back. Was it a gift to you both? Are you prepared to go to court to get their money back or do you mind him basically walking off with a free £25k?

I think if he's a reasonable person he should feel like a bit of a shit taking 50% of it.

oscarwilde Thu 11-Jul-13 13:59:10

You can't afford to pay the mortgage but renting somewhere will be £100 more per month? I'm sorry but that doesn't make sense.
Were you married when you bought the house or did you have a joint tenants in common agreement (which your mortgage provider would have insisted on)?
Vis the split of equity - I don't know the backstory and whether your ex has a moral entitlement or not but if it was a gift to a married couple, and your marriage has broken down through no fault of either party; provided that your DD will have 50:50 residence with both you and your ex; then I would consider splitting it.
If you will be the primary carer - I would suggest to your ex, that you would be fools to sell now and come to an agreement about the split in equity when your daughter comes of age. That assumes that you can find a way to maintain the mortgage though.

manitz Thu 11-Jul-13 14:05:41

can't you keep the house and get housing benefit to cover and interest only mortgage. Leaves your ex free to rent another place though he will still need to pay you maintenance. You need to agree if he will take a share when the house is eventually sold - I think it's usually when the child turns 18. I am not a solicitor but I know friends who have kept the family home until child 18. You could also get a lodger under the rent a room scheme though I don't know how that affects benefits.

NightOfTheCactus Thu 11-Jul-13 14:09:53

Well the gift was for me - but I guess by default it ended up being for both of us because we were getting a joint mortgage as a married couple. My parents certainly see it as having been a gift for me - but I think my husband sees it as being a gift for us both.

Also, his view is that for the past 6 years, he has paid the mortgage (so about £40K of his money) and paid all the bills and given me money for housekeeping, so he sees it as we have put an equal amount of money into the house, so we should get an equal amount out of it.

I'm not sure that he puts much value on my role as a SAHM during that time. I suppose once DD started going to school (and she's in Year 2 now) I should have got a job - but I didn't because of my illness (OCD). Unfortunately my OCD manifests itself in being scared to do stuff around the house because of a fear that parts of it are contaminated and I might spread the contamination, so it ended up in our house being really messy and cluttered, and when I was especially ill I was very depressed too, so I didn't get much done - so I think he'd argue that I didn't really do my job as a housewife, though I did look after DD when she was here.

I feel bad for my husband, because he has been "keeping" me essentially for 6 years and I don't want to rip him off, but I also feel really guilty towards my parents who meant the money to help me rather than him.

I'll admit I'm scared of his reaction if I fight for the deposit. He's not violent, but he's pretty emotionally cold. He's just been working away for the last 6 months and it was in April we decided to split - I was seeing him only other weekend and my mental health was improving vastly, though is worse now he is back working in the same city and in close proximity. I hate confrontation, and my OCD makes me worried about doing the "wrong" thing. I feel really torn.

I suppose I have to think about the fact that I'm going to need to live off this money until I'm well enough to retrain and get myself a decent career, which is what I want to do now I'm feeling a bit stronger - and how much money I have/where we live will have a big effect on our daughter. I still have to see him though, and we still need to be civil towards one another - and I don't want him to be destitute - not only because I wouldn't want that for anyone - partly because he's still going to be having overnight access to DD

Sorry, I'm rambling now... blush

SolomanDaisy Thu 11-Jul-13 14:13:04

The building society's estimate of equity is based on the assumption that your house is worth exactly what it was when you bought it. It could be well out in either direction. So you may have more or less than you think and it might be easier to make a decision when you know. Your ex would be v unreasonable to claim any of the£50k.

NightOfTheCactus Thu 11-Jul-13 14:19:13

Sorry - crossed posts with a couple of people.

We haven't sorted out residency with our daughter yet. I'm not 100% sure whether it will be 50/50 or whether I'll be her main carer and he'll see her a bit less but still have her overnight. At the moment he's seeing her a couple of evenings a week driving her to clubs, and will take her out during one day during the weekend and bring her back here - but he's staying at a friend's house, so I suppose once he has his own place things will change.

One of the solicitors I saw suggested the interest only mortgage thing. I then asked our building society and they don't do interest only mortgages anymore - and I gather most places are phasing them out?

We bought our house when we were both earning, but I was pregnant, and didn't return to work after DD was born.

My husband's pay has basically dropped £10K per year as he was made redundant and has started a brand new career where he's having to begin at the bottom - I know that for one of us to take the mortgage over from the other, that person would need to be earning at least £25K per year - STBXH is only earning £21K - and because of this I would be very surprised if another mortgage company would touch us to give us an interest only mortgage.

Staying here would be my preferred option.

I know it sounds daft that it's cheaper to live here, but I can't afford to live here - basically, Housing Benefit will only pay interest on mortgages - they won't make mortgage payments. Since my mortgage company won't change to an interest only mortgage, the only option I can see is to sell the house and release the equity - but then I'll be using the equity of the house to pay rent on a new place rather than claiming benefits (which I then won't be able to do). Does that make sense?

NightOfTheCactus Thu 11-Jul-13 14:21:38

Of course if I'm missing a trick on keeping this place or there's anywhere I should go for more advice, do please tell me!

glitch Thu 11-Jul-13 14:23:03

I don't think he can make you sell. If he isn't paying the mortgage then you can claim Mortgage interest payments from the DSS. I'm not sure how long they will pay them for (it might be a 2 year limit) but it will help for now.

glitch Thu 11-Jul-13 14:25:07

Sorry, crossed post slow typer!
How much extra would the repayment bit be if the interest was paid? Could you afford that?

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