Can somebody talk me through how to buy out STBXH please?

[nostaples]

Just that really. Mid divorce and want to keep the family house. STBXH left last December and is currently renting. He's putting pressure on me to sell the house but I have the two children full-time. There is about 80 grand left on the mortgage. I could probably cover the mortgage myself without any contribution for him but how would I go about buying him out? I'd have to remortgage the house and increase the term? No idea how it works. Would welcome any advice. TIA

Should add that we're waiting for an actuarial report on both our pensions (both teachers but dh has been teaching 10 years longer and at a much higher salary for longer) and I plan to offset my share of his pension against the house.

Work out how much it's worth now, either estate agent, bank valuation or informal. Half the difference between existing remaining term and this value (presuming a 50/50 thing, YMMV). Remortgage to increase mortgage by that figure. Arrange with conveyancing solicitor to give that amount to him. You continue mortgage payments on the new mortgage which will be the original remaining amount plus equity share you gave to him.

Increasing term can definitely ease the increase in payments. Interest rates are very competitive at the moment so it's not the worst time to remortgage.

Increasing term can *decrease payments I mean. Sorry for typos. I'd agree get the house nailed down, pensions can be quibbled over as part of divorce but you want to secure your home.

Bear in mind whilst still married all arrangements are informal. Assets and liabilities are shared between spouses. Even if you remortgage and it's in your name he still could make a further claim. Hopefully if it's a fair arrangement and he's not a cock about it it won't come to that.

Thanks @MargotsFlounceyBlouse So if there's 80 grand left on the mortgage, the house is worth 280 and there's 10 years left...

Sorry, not sure I get it.

If your house is worth £280k, and you have £80k on the mortgage, then you have equity of £200k.

If your divirce settlement required you to split that equity 50/50, you would each get £100k of equity. Your equity would stay in the house. His would be paid to him.

You would therefore remortgage for £180k in your sole name - £80k to cover the existing mortgage, and £100k that you would give to him. That would leave you with your £100k equity tied up in the house.

At the time you remortgage, your conveyancer would tranfer title of the house into your sole name.

However, you need to do that once the divorce settlement has been agreed. That is because you may not be splitting the equity 50/50 if you are offsetting the value of pension assets. So, you need the whole settlement agreed with him before you give him any money at all, otherwise things could get very messy.

Equally, stamp duty will be payable in normal circumstances on the amount you pay to him for transfer of title. However, there is an exemption for transfers made in pursuance of a financial settlement in divorces. So you need the settlement agreed in order to benefit from that exemption.

Just to be clear - you need to take out a mortgage in your own name ie a bank needs to be satisfied that you alone can meet the repayments.

If there's 10 years left, it sounds very doable as presumably you'll be able to lengthen the term to make it affordable.

In terms of settlement to your husband, that needs to be part of broader legal negotiations; as your children are living with you, it shouldn't be a 50:50 split (you should get more). But you also need to take pension entitlements for you both into account.

Discuss all the above with your solicitor in the first instance, while getting a valuation from the estate agent (emphasising it's for family law purposes ie you'd like the lower valuation!), and start applying for a mortgage.

X post with SlightlyMisplacedSingleDad

just to add, maintenance payments are not usually (based on my experience) taken into account when applying for a mortgage. That's what really became my stumbling block when I was (I still am) in a similar position to you.

Depending on your age & income you may struggle to get a mortgage on your own. So you need your solicitor to push for a greater share of the equity to you, to help your situation.

You need to obtain an up to date mortgage statement to see what the outstanding balance is were you to pay off the mortgage now. This isn't your equity.
Valuation £280k
Remortgage costs. £3k
Outstanding mortgage £80k
Equity £197k split between 2 £98.5k

Your new mortgage will be £80 + £98.5 = £178.5k
Ex will receive £98.5k of this.

This IS your equity!

I'm offsetting the equity (about £400k) against his very generous pension, cash in the bank and some of the spousal maintenance he could be made to pay if I pressed it

You are all brilliant. I get it now and have had a go with a mortgage calculator. I think it will be just do-able but as the children are living with me and his pension is greater than mine I would need and should get a greater share than 50%. Thank you all so much. At least I understand the process now.

'Discuss all the above with your solicitor in the first instance, while getting a valuation from the estate agent (emphasising it's for family law purposes ie you'd like the lower valuation!)'

Please don't go down this route! Your ex will also be getting valuations, and the mortgage company will also value the property. As you have considerable equity their valuation won't affect their offer much, but your ex may fight for a bigger pay off if their valuation comes out higher than yours.

He also needs to be able to provide a home for his children and this should be factored in. How old are your children? Also, how much different is his pension than yours at this current time?

@Soontobe60, the children live with me as their primary carer. They have never stayed at his flat and don't intend to (their choice).

His pension is different because a) he is older than me b) he went straight into teaching after university c) he had a higher salary as a HoD and then SLT member d) he never had mat leave or worked part-time.

Weirdly, we are now on exactly the same pay scale, though he's been at the top for a while and I've got a couple of years to go, but this is typical of how men's and women's careers plan out post children, even in exactly the same job!

I am using a solicitor but there have been various delays for one reason and another (at my end not his) and only now really starting to get on top of the finances.

Oh, sorry, you asked how much different. Not sure. That's why we were advised to get an actuary report as teachers' pensions are so significant. I think his will be substantially bigger but he's nearer retirement (he is mid 50s and I am mid 40s).

When negotiating the offset, remember that not all pounds are equal. Because it can't be accessed for such a long time, £1 in his pension won't translate into £1 in house equity.

Equally, divorce settlements are according to need. Since he is closer to pension age than you (and therefore doesn't have the same opportunity to improve his pension following the divorce), he will reasonably argue that he should keep a greater share of the pension assets. It's the corollary to your needing a greater share of the property assets now, to house the kids.

That will all need to be considered when finalising the settlement.

Wow, @SlightlyMisplacedSingleDad but HOW does anybody decide how to balance those things?

In theory and a year ago I might have thought I had greater earning potential and would go on to get a good pension, now going through divorce, caring single-handedly for my children and caring for my seriously ill (one terminally ill) parents I feel on the brink of either quitting or being pushed out of my job. Can that be taken into account?

caring single-handedly for my children and caring for my seriously ill (one terminally ill) parents I feel on the brink of either quitting or being pushed out of my job. Can that be taken into account

Child maintenance will be calculated based on your ex's earning only. There is an online calculator that can be used.

Sound like that you will not be entitled to child and working tax credits if working full time on reasonable salary. However, don't forget the council tax reduction as there is only one adult in the household.

Can't see that you need to look after your parents influencing any settlement as not your ex's business.

Don't quit your job as that may go against you. Both partners are expected to maximize their earnings. Hope you don't get pushed out of job.

Good luck

Speak to the current mortgage company. I remortgaged with same company (was on a great rate I didn’t want to lose!). The existing mortgage is on old rate and the extended bit on new rate. I used the bank’s solicitors for remortgage and transfer and it was all done cheaply online / by email. As it wasn’t a new mortgage I didn’t have to pay a mortgage fee or get a surveyor or anything as staying with same company, just admin costs which were added to the mortgage. You might find it cheaper to use different solicitor for the house than the divorce.

@Dropthedeaddonkey how was it not a new mortgage? I'm in Ireland. In this situation, I was treated as if I was applying for a mortgage from scratch. It was not re-mortgaging.

The current mortgage was jointly held? So I am confused over the re-mortgaging element?

Why did you not need to take out a new mortgage based on the current market value of the property?