Staying on the mortgage for a long time

[CrazyPavingRules]

We have very little equity in our home, but reasonable pension pots.

I earn a decent income, probably enough for me to stay on the mortgage and still be able to get another mortgage to modestly house myself. My ex-wife-to-be on the other hand will not be able to get a large enough mortgage to buy a house big enough to house herself and the children - even if she takes all the equity in the family home. In practice I'd like to have a small amount of the equity to get a 10% deposit on a house myself - or maybe only 5% now the government has backed that option.

My thoughts are that we could buy a house for her in joint names now (which she would either 100% own, or I would have a very small, say 5% stake in if that is required legally), and I could pay half the mortgage for the next 13 years. She would then be old enough to take a lump sum out of her share of the pension pot, which would reduce the repayments down to a level which she could afford without my involvement, and I could come off the mortgage then. By that time all the children will have long flown the nest, and so if the pension pot has shrunk for any reason, or if she would prefer not to touch it for this reason, she could downsize instead.

Does anyone have any experience of doing anything like this?

Hi, I don't have any experience of this (yet) I'm afraid, but am also interested as I'm coming at it from the opposite viewpoint. I am looking into Barclays joint borrower/sole proprietor mortgages as I wonder if this might offer a solution. The extra stamp duty for a 2nd home is a big issue, I haven't looked into the Barclays offer enough to know if that still applies.

Your best bet is to speak to a solicitor. Chances are the interest on a second mortgage will be higher. Plus what happens if she loses her job, remarries, or you lose your job etc.

@sashamc

I am hoping that if the whole thing is wrapped up as a Mesher order, or at least as a consent order which makes it clear that I'm not entitled to live there, but only entitled to money at point of sale, that the second home stamp duty will not apply. Capital gains tax will not be a problem as I don't plan on retaining any meaningful equity in the jointly owned house - just enough to keep the bank and the lawyers happy.

@sashamc

I am hoping that if the whole thing is wrapped up as a Mesher order, or at least as a consent order which makes it clear that I'm not entitled to live there, but only entitled to money at point of sale, that the second home stamp duty will not apply. Capital gains tax will not be a problem as I don't plan on retaining any meaningful equity in the jointly owned house - just enough to keep the bank and the lawyers happy.

@bigbaggyeyes

Thanks. Good point on the higher interest charges, but can't be helped - keeping a roof over my kid's heads is more important.

With the other things, losing our jobs would be a problem - this solution definitely ties our fates together. If she remarries I would expect to be released from the arrangement.

@bigbaggyeyes

Thanks. Good point on the higher interest charges, but can't be helped - keeping a roof over my kid's heads is more important.

With the other things, losing our jobs would be a problem - this solution definitely ties our fates together. If she remarries I would expect to be released from the arrangement.

How would you get the money to buy the 2nd home?
Fwiw my ex is staying on this mortgage (it's interest only so affordable) but has signed ownership to me as part of our settlement. I'm paying the mortgage. So the kids who are here most of the time keep the big house.
He's bought a new place using a mortgage Co who were happy for him to be named on a different mortgage too. (not all of them are) And because it's divorce etc it's not treated as a 2nd home.

@PicaK

We would need to sell the current family home (which is too expensive) and downsize it to a smaller but adequate one for her. That would release enough equity for me to put a minimum deposit on a home for myself. The children will spend 2 or 3 nights a week with me, as will the dogs, so I can't just rent a room in a shared house or anything.