Supporting 2 mortgages

[atr79gb]

I'm currently going through a divorce and had my first mediation session yesterday.

One of the challenges we have is that I currently provide for my wife 100% (she doesn't work). We have around £240K equity in the house and 2 children, aged 5 and 8.

There is around £170K left to pay on the mortgage. My wife had a low paid job when she worked before and she readily admits that there is no way she could take on the current mortgage.

So, it looks like this comes to a choice between selling the house and me paying for the mortgage whilst not living there. We're planning on a 50/50 custody split so we need to be able to support 2 homes.

My mediator has asked me to contact a mortgage broker to see if it's feasible to take on 2 mortgages. I earn £75k a year. I understand as well as taking on the additional mortgage payments, I would be liable for capital gains tax.

It sounds like this would not be feasible financially but I would rather investigate the situation fully. I'm planning on contacting some mortgage brokers over the next few days.

Has anyone found themselves in a similar situation?

I am guessing you are initiating the divorce then, which is why she is not keen on her life changing. Is there someone else involved? Sorry I know it is none of my business, but it is the only thing which really seems to explain the dynamic here. In other words, she has not taken responsibility for her own financial situation because she thought there was a partnership in place until something changed.

Regardless of the reason for the break-up, I think your settlement should set her back on her feet and not support her, for the reason that you will resent long term support and it also just defers the problem a decade or so down the line.

I think in Scotland the limit of spousal maintenance is three years, which is intended to give stay at home parents enough time to get back into the workplace, plus a 50 percent split of assets including pension. In other words, there might be a way forward which is provide spousal support for a couple of years but means you are also coming out with a fair split of assets. I don’t know if that is an option in England - it would be a transition period rather than a long term commitment (and I certainly would not go down the mortgage route).

I don’t know. I think your lawyer is best placed to advise.

@Arella - actually, she initiated the separation. A long story but she told me she wanted to separate just 12 days after my mother passed away. This was a very hard time for me personally.

I suspected at the time that she hadn't really considered the financial implications of separating and divorcing. The situation now is that we are separated but she has no incentive to divorce as that will affect her own lifestyle.

We are essentially in limbo right now, neither together or divorced. She won't ever discuss the divorce with me unless she has to. I would like to divorce to be able to move forward with my own life. She would like to continue to live together as friends in the same house, I've told her very clearly this is not going to happen.

I'll certainly look into providing spousal maintenance for a limited period of time. That might be a better option than an unequal split of assets.

I agree that paying both mortgages is a bad idea.

Oh dear, what a mess. I am also in separation limbo but for very different reasons and having been to court (long story but not finance related as I am self-sufficient). Sorry for my assumptions, I was tired and should have kept my mouth shut (metaphorically speaking). Friends together in the same house is clearly a no.

I am sorry for your bereavement and the timing of your separation . I can see why you are looking for every way out but it needs to be sustainable and also fair to you.

An important element of protecting your children is that you remain in a position to support them long term. Sacrificing your financial security to enable your ex wife to carry on living in cloud cuckoo land puts your children at risk. I’m afraid you need to get a bit tougher.

Do you have savings, pensions to take into account?

I agree with @PurpleWithRed here. Enabling your ex's delusions and refusal to take responsibility for her own finances is not helping your children. Ongoing maintenance is probably not a better solution than an unequal split of assets, because the unequal split enables her to set up for her new life and circumstances properly in a way that a small amount of money for a limited period does not. Similarly a mesher order actually makes her life pretty hard when the kids grow up.

As you are separated she is entitled to claim universal credit (and child benefit). She must do this. Now. You should really be telling her, formally and in writing, that you will cover her expenses during the waiting period and no longer. Give her an actual deadline when you will stop giving her money. And do it. If she doesn't claim
UC, then she is the one in the wrong. Entirely. She just has to face facts.

If you're living in the same house and paying all the bills/mortgage right now, then her expenses are quite minimal anyway. Put the house on the market and agree a sensible assets split - the mediation process should really be focusing on determining how to best split the assets to meet both of your needs. It does need to be fair to you too.

You are not financially responsible for your ex for the rest of her life. And she does have a responsibility to provide for herself and her children too. She wanted to end the relationship - this is the direct consequence of that.

Bear in mind that, no matter how much you think you think you are willing to pay for her right now, 13 years is a long, long time. Are you really going to encumber yourself with a financially dependent ex wife who just does not want to work for that time? You are very likely to want to move on with your life in various ways (buying a house you want, making financial choices etc) and need to be able to do this.

It is for this reason that, regardless what you agree and put in a draft consent order, that a court will look at what is fair for you both. A judge just won't seal a consent order that screws you over for well over a decade. Doing so really isn't in the best interests of the children.

Thanks for all the replies.

I agree with the comments. To me, it seems it would not be fair to continue to support my wife financially in this way as it would limit my ability to support my children financially in the future. For example, I feel it would be wrong not to be able to send my children to university due to having to support a second mortgage.

I've discussed the situation with my wife over the last few days and have told her that it isn't feasible to support 2 mortgages.

When she worked previously, she had a low salary - this certainly wouldn't be enough for her to be able to take on the current mortgage (£170K) in her own name.

It looks we would almost certainly need to sell the current property and split the assets. Due to the disparity of incomes, I would be comfortable with an equity split of more than 50/50 in her favour.

I would love the children to stay in the current home but I just can't see how this is feasible as she isn't able to take on the mortgage.

My other suggestion would be to agree to a higher level of child maintenance than the minimum amount. I would rather make sure that the children have everything they need.

I spoke to my solicitor yesterday who strongly advised that taking on a second mortgage is a bad idea.

I've also contacted my mortgage lender to see what the options are regarding the current mortgage. They suggested we could do a transfer of equity assuming my wife can take on the mortgage in her sole name. Obviously, it's extremely unlikely that she would be able to do so and if she is unable to get a mortgage in her own name, there isn't much they can do.

There are mortgage providers who will take benefits into consideration but she would still need substantial income to take on a £170K mortgage.

So, it looks like we would need to look at selling the current property. Given, the disparity of incomes, would an equity split of more than 50/50 in her favour be fair?

Could you take a bigger mortgage to keep that house if you give her a large portion of the equity? Otherwise, I would think a sale will be necessary x

You haven't disclosed what other savings, debts and pensions so it's hard to say what the asset split would be.

From what you've said, legally she would be likely to get more than half as you would both have the means to adequately rehouse in that scenario.

@reallyrandomwords the main issue is affordability.

Having to support both mortgages would mean a 10-15% reduction in my own mortgage capacity.

As you might see from the comments, there is also no guarantee that my wife would be able to support herself after the house is eventually sold.

So, a sale after a mesher order would potentially be worse for her than an equity split. My concern is also that I would have less money to be able to support my children in the future.

I want my children to be able to stay in the current house but I don't particularly want to support an ex wife who is unwilling to support herself.

The house needs to be sold
Your wife needs to work
It’s very likely she’ll get a higher share of total assets

What pensions etc are there ?

@atr79gb you misunderstand me. Instead of selling, would it work for YOU to keep that house, but with a bigger mortgage, freeing up some of the equity to give to her. That way the kids still get to stay there when they're with you, there's only one mortgage, and she takes the equity for a smaller property.

I've had some more discussion with my wife this evening regarding the sale of the house and/or removing myself from the current mortgage.

She is really digging her heels in and insisting that she should be able to stay in the house with me paying for it, whilst my name is still on the mortgage. She has told me she now plans on going to court and is certain that a court would order that I continue to pay for and remain on the mortgage.

I feel she is misguided in her assumptions. From speaking with solicitors and mediators, it seems to me that she is entitled to stay in the current property but that the mortgage would have to be transferred to her own name.

I have told her I'm happy to agree maintenance to help her out with living costs (within reason) but that the mortgage absolutely has to be in her own name.

What concerns me is the massive cost in going to court rather than using mediation and I don't think she would be successful anyway.

It seems unfair to me that whilst I work full time and support the children 50% of the time, she is not working and expects me to pay for 2 houses.

At the same time, I do respect that her role as a mother has enabled me to progress my career so any settlement should take that into consideration.

Do my assumptions over the likely court outcome sound reasonable? I'll speak to my solicitor tomorrow AM.

Just crack on and get it to court if needed
She’s rather deluded

Has she actually spoken to a solicitor or just her friends.?

She might have a nobhead of a solicitor. My ex-wife's solicitor told her to demand 90% of our shared assets.

30 grand in solicitors fees later the judge at FDR told us he would award a 55-45 split in her favour if he was adjudicating

I think the best way to make this happen is to sell the family home and give her ALL the equity.

She’s never going to make the income that you do, and any job she does get won’t have the flexibility around childcare that you have re working from home, so she’ll really struggle to find a job that fits school hours, school holidays, inset days, snow days, children’s sickness etc, and she’s never going to earn enough for the lifestyle that you will have nor for a decent retirement, unless she has an unexpectedly successful career.

Basically, she’s up shit creek and she knows it which is why she’s desperately trying to cling on to her current living conditions.

It’s a lesson to all women, not to sacrifice their earning potential when they marry and have children.

She may be confused... my partner had to stay on there mortgage with how ex, because she couldn't get her own- but with an indemnity. He was not responsible for partying it any longer and couldn't be chased. If she defaulted more than once the property would be sold. So he was on it in name but that's all.

@reallyrandomwords - thanks for the reply.

I hadn't considered staying on the mortgage with an indemnity.

In your case, did staying on the mortgage affect your partner's affordability?

I've heard of mesher orders with an indemnity where if the spouse defaults on the payments, the arrears would be deducted from the spouse's share of the proceeds.

He got a mortgage in his own name without any problems. It was more problematic when we got ours together but we found ways around it. But his on his own was fine.

@reallyrandomwords thanks. That sounds like a potential solution, although obviously I'll need to look into it properly.

Ideally, I'm looking for a way for my kids to stay in the current property but without affecting my own affordability as I'll also be living with them 50% of the time.

From my wife's perspective, I still believe this would be inferior to an equity split in her favour, but she essentially wants to be able to stay in the house at all costs.

Obviously you need to make sure your children have a safe and comfortable home. Both with yourself and your ex.

That being said. Your ex should now stand on her own two feet and get a job instead of expecting you to continue to provide for her 100%.

She needs to realise that you need to financial provide for yourself too now.

You havent asdressed your respective pension situations or other savings

@VolcanionSteamArtillery - I'm currently awaiting CETV calculations for both of us.

There are no savings. Mainly due to her consistent over spending and despite having a decent salary, we're consistently within our overdraft. We haven't had a holiday in several years.

I'll reply to the thread once I receive the CETV calculations.

Noone can tell you whats reasonable without including your pension. Including your solicitor. It appears you're wasting everyone's time.