Mortgage or renting after divorce?

[ohlittlemy]

For anyone who has gone through the divorce process, after selling the family home did you buy your own place or rent somewhere? If it was a 50/50 split I'd get about £20,000 from the equity but I only work part time so not sure what sort of mortgage I could afford. If I was to rent, I believe the money from the house sale would stop me getting any benefits so I'd be eating into my savings. Feeling a bit lost! Just trying to get an idea of what my options are.

Do you have kids? Is that why you are part time? Are you going to be able to go full time and what would you earn then?
Find these answers out and talk to a mortgage company and maybe a mortgage broker. Some will take child maintenance into account etc.
You need to know this before you can agree your financial split and compare it to what your ex can afford. You should start again on an equal footing.

@PicaK

Do you have kids? Is that why you are part time? Are you going to be able to go full time and what would you earn then? Find these answers out and talk to a mortgage company and maybe a mortgage broker. Some will take child maintenance into account etc. You need to know this before you can agree your financial split and compare it to what your ex can afford. You should start again on an equal footing.

Yes we have one young child so I wouldn't particularly want to work full time yet if I could help it. Thank you. Feel like I'm not sure where to start! Haven't actually separated yet but talking about it and want to get an idea of what my situation would be like if we did.

It's really important to take in account your whole financial situation (yours and your H's) and get advice from a solicitor about how it would be possibly split depending on other factors that may or may not apply.
The Court would decided based on the needs of your child first ie adequate housing at each parents and then the needs of the parents eg for you a small 2 bed home. Generally it would be better to get a mortgage since renting is sometimes the same as paying for a mortgage in most areas. I personally would aim to buy a home over renting if possible.

@Crumbs22

It's really important to take in account your whole financial situation (yours and your H's) and get advice from a solicitor about how it would be possibly split depending on other factors that may or may not apply. The Court would decided based on the needs of your child first ie adequate housing at each parents and then the needs of the parents eg for you a small 2 bed home. Generally it would be better to get a mortgage since renting is sometimes the same as paying for a mortgage in most areas. I personally would aim to buy a home over renting if possible.

Let's be brutally honest, this isn't going to go to court. There's £40k in equity which could easily be wiped out in legal fees if it got to final hearing. If my STBXW turned to me demanding the lion's share of the assets, I'd think "well, I might as well fight you in court then. If you're insisting on me having next to nothing, you can end up with next to nothing too." Also, the OP would basically be fighting over around £8k because she's very, very unlikely to get more than 70% of the equity, which means she will almost certainly lose what she stands to gain in legal fees and then probably a fair bit more. So this needs to be considered a negotiation based on fairness. That's the first point.

The second point is that both parents will have the same housing needs. Often one divorcing partner seems to believe they are entitled to stay in the FMH even if there's not enough money left for their ex to even rent a room. My STBXW briefly went through this phase until she had the good sense to hire a solicitor who managed her expectations.

At best the OP might be able to get a Mesher Order where she stays in the FMH and then gives the ex their half when the child turns 18 (or, more likely 13 because by then the OP will be expected to work full time so shouldn't continue being dependent on an ex). However, even then that would only happen if their ex can adequately house themselves in a way where they can have their child over to stay. Again, my STBXW tried to convince me I should "be the man" and end up in a grotty bedsit that my three children would never want to visit so she could stay in the FMH and had to have her expectations brought back down to earth. The key of course is that the kids need somewhere similar to live when with both parents.

Go and see how much of a mortgage you can get and take it from there. You can't really make an informed decision until you know this fact.

It's all so overwhelming!

I wouldn't be demanding anything, if we divorce it would be my choice, nothing "bad" has happened so would be amicable (hopefully)

It's all so overwhelming!

Yes it is. So break it down into small steps. And the first step is finding out where you're going to live.

@Unknown83 I never meant they would have to fight it out in Court. It's simply the due process of their consent order being approved by the Court

[quote Crumbs22]@Unknown83 I never meant they would have to fight it out in Court. It's simply the due process of their consent order being approved by the Court[/quote]
I appreciate what you mean but because there is no point in it going to court, then what a court would decide is irrelevant. In the position of the OP's ex, he will know he can negotiate very hard because there is no point in it going to court. In his position, he can basically say 50/50 of £40k or 70% of bugger all if it goes to court. It's a strong negotiating position to be in and makes what a court would decide largely irrelevant.

@11stonesomething

How many years away from free pre school funding are you? How many years away from primary school starting? I think its really useful to have a short/medium term plan. Ok ill be broke for 18 months but then i can go full time etc.

Remember as a divorced couple the context changes. You are no longer the co parents free childcare. Any childcare costs incurred allow them to work too and they are liable for half.

What are the arrangements going to be for your child and how much maintenance will you be receiving it any.

Is the child benefit in your name? It will need to be to qualify for means tested benefits.

Use the benefits calculators such as entitled to. The first 6k of savings is ignored. Then any savings 6-16k are included in calculations. Any savings of 16k plus make you ineligible. So it is likely you can hang onto a chunk. Even if you aren't entitled to a lot of income for universal credits it sometimes gives you access to free or subsidised childcare allowing you to work more hours. Can you upgrade your car to one that will last 10 years to bring you under the threshold.

I moved out into rented. It was fine. People behave like it is child Abuse. It wasn't. It was necessary to maintain my sanity and to move forwards. Plan was to stay 1-2 years until i had my settlement. I stayed three and had grown to love the place and was sad to leave but bought a lovely house instead. Be aware you may stay longer then you think so look at catchment areas. Part time income may mean you need to ask a friend or relative to be your guarantor to rent. Be aware or that too.

We're a few months away from free pre school funding, would start school Sept 2023. The child benefit is in my name. I did have a look at the benefit calculators but the amount it gave me seemed ridiculously high! Unless nursery costs were counted in there. Do you know if the 30 hours free childcare still applies to single working parents?

Just do an online calculation (as offered by many banks) to get a rough estimate of what you could borrow and get a mortgage if you can. Renting is not great. However do be aware help towards a mortgage is very limited under UC so then do an online calculation of what you would receive in UC based on any mortgage payments and then see if you could manage on that combined with any child maintenance you might receive. Perhaps worth increasing your hours if you can