Retaining interest in house on separation.

[Notsuchaniceguy]

Hi, my wife and I have begun to discuss separation. I've posted before on her view that although she doesn't want 'us' she wants the creature comforts. I get that.

We have no children of our own and are in 50s and if we sell up it's rented for life- not enough equity in our mortgaged property.

One option might be that I move out into rented but pay half the mortgage and so retain ownership of the property.

Has anyone done this? It seems to have pros and cons if doable.

As it's a repayment I continue to increase my equity as does DW.

But as DW says, if I asked for a divorce I presume I could force a sale. Can that be protected for a period of time - we sign to say no-one can force a sale for x years unless one of us dies or something like that.

I guess another risk is DW remarries or has a partner move in. In that case I'd probably be happy to be bought out but not so happy to pay half the mortgage. Although I guess I still am buying the bricks and mortar?

I appreciate a lot of questions and I know we'd need legal advice but I am wondering if anyone has anything like this?

Also will post separately about 'amicable' separation and divorce to save on legal costs.

So are you separating but not divorcing, and keeping shared assets for the foreseeable future?

Can you take out a joint second mortgage rather than renting, using that to buy another place, then rent out a room (possibly rent a room in both houses) to pay the mortgage on that property? It would be tax free up to £7k and as you rent a room not the full house it is easy to evict. Could rent on weekdays only for example, if you like your space. Issues around capital gains tax on your other house though, if it's not your main residence.

Honestly I think you may be better off separating formally and sorting the finances, but I appreciate it's hard. A lot of people in the past would just continue to live together but lead separate lives. Is that a possibility?

Thank you @ArcticSkewer

I'd assumed formal separation, separating all finances and moving to divorce at some point if needed- eg new partner. Just maybe me having a share in the house but not living in it so I can get equity back or leave to children. I suppose that would be an issue if I died soon then DW would be forced to move. Right now my life insurance and death in service goes to her. If we'd separate us would I want that or want it to go to my adult children?

I couldn't ask DW to have a lodger as our house is a tiny old 2 bed one bath.

Without selling it we have no capital to buy anything else.

Separate lives would be very hard in this house.

We absolutely need financial advice for specifics - just wondered if doable ir anyone had tried

Honestly if you are separating and gave no joint children, just sell and split the equity and move on

so much simpler

Yes I could force that except DW wants to stay in the house, at least for now, just not with me. I feel I owe her that. No one else involved on either side so an amicable separation and eventual divorce seems possible.

She can't buy me out - she couldn't raise an affordable mortgage unless it ran until she was 90 odd.

We have a mortgage of £130 the house is worth £280. We are mid 50s.

She earns but less than £40k in a full time demanding job.

I could just about afford to rent and pay half of the mortgage. I earn £53k and it will rise in a few years to around £60k

Hence this possibly daft idea.

I don't understand the point of renting - it's just throwing money away.
If you are separating, sadly both of you will probably be poorer.

What is the value of all your assets, including pensions (have you had yours valued?). She may end up with more money than she thinks if you have a good pension and she doesn't. That could come from the house - so for example you keep your pension, she keeps the house. Then she could remortgage to £130k on a £40k salary (there is no max age limit these days) and keep the house.

Probably better to bite the bullet and get the finances sorted. You renting long term doesn't seem a viable option.

And change the beneficiaries of your life insurance etc to your children now. You are in the midst of the heartbreak of separation at the moment but your will should be clear that what you have goes to your DC. IMO anyway. And sell the house, unfortunately that’s the reality of divorce and you can both have a fresh start whatever that looks like.

sorry but you are being daft and doing neither if you any favours. And you are not responsible for her, so drop the white knight act.

You are separating, ending your relationship and starting new lives. Just do that and stop hanging onto the house. A commitment that will only cause arguments and engagement where none is needed.

The financial problems created by the split don’t get any easier as you get older. They get worse. Do you really think it will be easier to sell up and buy in your sixties.

She will have to move if she can't afford to buy you out. Simple as. A clean break is best for both of you. Renting not an issue.

Sorry your being an idiot for offering to pay half the the mortgage. Cut your cloth - sell the house. If she can't afford it then so be it

If the deeds to the house and the mortgage are in both your names, neither of you could sell without the other's signature on estate agents' and solicitors' instructions, also land registry documents would need both signatures.

Both pensions public sector - so both good. I've paid more into mine in added years type stuff. I hadn't considered her being able to have a larger or longer mortgage due to pension redistribution. To explore further.

That said as the mortgage is £130k, to buy me out she'd have to increase it to £130k plus half current equity so about £200k -on a £40k salary at age 55. Surely impossible?

I certainly don't want more than my share and expect to be a lot poorer. DW's position is more along the lines of better a poor relationship than a lot poorer/in poverty. I don't think it is an unreasonable view in many ways and it is a scale. If my choice was remain in an unhappy but survivable relationship or be homeless I know what I'd pick. I'd also pick live alone in a 1 bed flat and be bloody careful with money over an unhappy but survivable relationship. DW would perhaps not.

I know but at the same time that's easy to say and hard to do to someone. Or it is for me anyway.

I'm in the middle of a divorce. My ex chose to leave what was actually - IMO - a rather normal marriage - very few arguments, got on pretty well - just worn down a bit by having young children. He - as the lower earner - has chosen to give Up a lifestyle and comforts he can't ever afford on his own - to live a much poorer life. That is his choice. I don't wish him Ill but at the same time I'm not going to make his life easier and more financially comfortable at my own expense.
No good deed goes unpunished

Under your arrangement she'd have to effectively pay you rent for your half of the house. Sounds like a nightmare. Unless you were planning to let her stay rent-free out of guilt? And what happens about necessary upkeep?

That seems fair enough. He chose that option. Could he be claiming more but is choosing not to? If so do you know or understand why?

Not sure I follow?

She lives in the house, pays half the mortgage. I live elsewhere and pay half the mortgage plus my rent for where I live.

How is she paying me rent or am I missing something here? Maintenance and bills she pays for as I do whenever I live.

I appreciate it is odd and not in my best interest but as the mortgage gets paid so my equity increases - although capital gains tax would apply if it was sold and I didn't I've in it.

You are being daft
of course she wa ts to stay in the house while you pay and rent elsewhere… why wouldn’t she
vut if she can’t afford it she can’t afford it. Simple

You’re going to overcomplicate, tie yourselves together, resentment will build when new partners are on the scene rather than tip the plaster off now

Capital gains tax, you'll be liable for any gains that are realised upon sale unless you get a mesher order as part of the formal divorce financial settlement. I doubt a Mesher would be granted in this situation.

Laudable that you want her to have the financial security but not if you might end up with a big CGT bill. You can't do that for her this way without a potentially big penalty to yourself.

This makes little financial sense to me either...

You want to keep the equity in your house- fine. But your wife would need to pay you half the going rent as well as her half of the mortgage. This money could be out aside for your half of maintenance on the property - which as co-owner you'd still be liable for.

I can't see how she can pay half the mortgage and half rent if she can't pay full mortgage as surely it would be more?

On top of that you are paying a mortgage on a property you do not live in so you would be liable to 40%? Capital gains tax when you eventually sell which has to eat up any equity gain you had anyway. And you are paying out rent... which you won't get back whilst your ex wife is benefiting from this also as you are not living in the shared property.

Tbh you have £140k in equity and a £130k mortgage? Have you looked at shared ownership to buy somewhere yourself? I would have thought that would protect your equity better - your wife should do similar perhaps?

I wouldn't get stuck with this mix up as what happens if one of you gets a new partner - you've said you won't want to pay a mortgage ona home she moves someone else into... how would your future partner feel about not being able to buy with you as are you are still committed to the ex? Sounds to me like your guilt of the divorce is taking over the sensible part of your brain (and your ex is letting this happen as it is to her advantage!)

Yes that is a problem. I think we have to sell up and move on, both into rented with some cash in the bank.

Or stay and be miserable but with Netflix (hollow laugh).

Can't see either of us being able to get a mortgage at our age and with at most a 25% deposit. Not when a 1 bed flat is £125k where we are.

So your share of the equity would be £75k? And you are currently responsible for half of your £130k mortgage, so £65k-worth?

I would talk to a mortgage advisor.

What good would it do you to build your equity in a house you will never live in and presumably never sell? And how will you afford to rent if you have a mortgage to pay?

It’s good that your impetus is to be kind, accommodating and considerate, but is it realistic?

Can't see either of us being able to get a mortgage at our age and with at most a 25% deposit. Not when a 1 bed flat is £125k where we are.

You'd both have £70k deposit - that's almost half not 25%. A £50k mortgage should be attainable even in your 50s with the salaries you've stated

But most of your half of the mortgage will go on interest - it's not like you have a very small mortgage which is nearly finished so in which case it might be worth seeing it though a year or two

Could he claim more? As in a greater share than our current divorce settlement states? Yes most probably if he actually got legal advice but he's accepting less probably because maybe he's ashamed and embarrassed at walking away from a lovely little family and young children. Everyone we know is totally baffled and thinks he's nuts. As his wife I'm the main breadwinner by far and given him a lifestyle he can only dream of affording not to mention how easy I've made his life. But people will always think the grass is greener

I am mid 50s with dependents, on similar salary to your stbxW & was told I could borrow £41k from Nationwide. Go ask the brokers questions before you despair.

£41k? That sounds like 1x your salary@peanutbutterkid ?