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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.

manitz Fri 12-Jul-13 10:09:47

Hi Can you get dss to pay the interest only part of the mortgage and get a lodger to come in and use that money to pay back the repayment part. You could keep the mortgage in both names but switch to tenants in common and agree what proportion each person owns. When me and dp bought a house before kids I put down deposit from sale of my flat, we had a contract which stated how much we each owned. Then if your ex is not going to contribute from now on, he will own a smaller amount than you.

As far as his interest payments go, I know with our mortgage the proportion you pay towards repaying teh loan goes up over time as interes t is worked out over say 25 years at 100,000 but at 20 years that would be less if that makes sense. By one year it's pretty much all repaying the loan and hardly any interest payment so 5% of whats left to pay for one year is what they add to the loan payment.

All this aside you must get some legal advice. I think mediation would be a good route for both of you, it sounds like your ex stresses you out and is very forceful. I believe that mediation means that you get someone in the room to ensure both parties have a say. understanding the law could save you an awful lot of money. I must say that I think you both own the £50K as you were married but any decision must leave you in a position to look after yourself and care for your daughter. Maybe the law society has some ideas about how to choose a good lawyer and also about what mediation actually is. Or you could start with Citizens advice bureau who could direct you in the basics without feathering their own nests. Your ocd might entitle you to something. I hope you get a working solution sorted.

NightOfTheCactus Thu 11-Jul-13 16:13:01

We were on a 5 year fixed rate and he was paying £200 more per month at that point - it went down when the 5 years were up and we changed to a variable rate. I've seen the only 2 Resolution solicitors where I live - and neither gave me the impression that they could advise me (but that might have been because I was just doing the 1/2 hour freebie) Not sure which one I should talk to - but maybe I'd better ring and chat with the receptionist...

DuelingFanjo Thu 11-Jul-13 15:37:00

also - you say for some of the last six years he has been paying interest only and has only paid 9k off but over time has paid £40,000? this means he has paid 31,000 in interest? That's quite a lot to be paying in interest!

My mortgage repayments are about the same as yours on a fixed rate.

DuelingFanjo Thu 11-Jul-13 15:31:44

Definitely look into changing the mortgage. We recently changed and it went down by over £100 and that was fixed rate.

iheartdusty Thu 11-Jul-13 15:15:36

A solicitor is most definitely the right person to advise you.

Unfortunately some of the posts on this thread are incorrect or misinformed about division of assets on divorce.

The court looks at the factors under s25 of the Matrimonial Causes Act 1973, and usually the single biggest consideration is need.

Not 'contributions;' not being compensated for what each of you' have put in; but what you need to house yourself and your DD.

Please do take up your parents' offer to pay for an advice session with a solicitor, and pick someone who is a member of Resolution.

glitch Thu 11-Jul-13 14:59:46

I have just googled and seen an example of £100k at 3.63% gave MIS of £279 every 4 weeks. If the building society will change your mortgage term to 25 or 30 years that could drop your monthly payments down making the amount you need to find smaller.

Lavenderloves Thu 11-Jul-13 14:49:54

I think that the gift was to you both. If you wanted to ring fence the money you should have said so.

So split the cash however married couples do 60/40?

NightOfTheCactus Thu 11-Jul-13 14:45:09

(our mortgage is variable rate repayment, and as I say, my building soc won't change to an interest only)

NightOfTheCactus Thu 11-Jul-13 14:40:07

headlights even... blush

NightOfTheCactus Thu 11-Jul-13 14:39:20

doesn't help that doing official stuff triggers the OCD too - this all terrifies me and I feel like a rabbit in the headlines with no clue how to understand it all

NightOfTheCactus Thu 11-Jul-13 14:36:28

Sorry - I'm really dim about finances/official things - and can't do maths to save my life.

I know that my husband is paying £554 per month and the mortgage we took out was £110K I don't know how much of this would be interest? <very confused!>

glitch Thu 11-Jul-13 14:31:05

The interest rate they use at the.moment is 3.63%
As an example, this more than covers my mortgage interest at the moment. I don't fully understand it but rather than work it out mortgage by mortgage they just set one rate.
They will pay longer than the 2 years if you are on ESA.

NightOfTheCactus Thu 11-Jul-13 14:28:52

They could change the term, but I think I would still struggle

NightOfTheCactus Thu 11-Jul-13 14:27:47

glitch - I wouldn't be able to afford it - have no savings and will be just relying on benefits

glitch Thu 11-Jul-13 14:25:51

Will they change the term to a longer one so the repayment bit is smaller?

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?

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.

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!

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?

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 14:09:53

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

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.

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.

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.

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)

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