Husband wants to buy me out of the house

[Baffers100]

Hi all,

I had a joint mediation session today to discuss finances (our fourth session- a year of mediating now and thus far bugger all really achieved due to him dragging his heels).

We are 36 and 37, been together since 16 and 17. We've been married for 12 years and have lived in our home for 5 years. We are joint tenants named on the mortgage. We have 2 children, aged 7 and 4.

Well...he can't afford to buy on his own with his salary (he's a teacher and still earns more than 'average' but we are in an expensive area in Berkshire). He doesn't "want" to rent as it's "dead money" (but he could rent...) so today in mediation he had a radical plan...

...what if I leave your pension alone (null point- we have the same sized pension pots thus far and mediator said he wouldn't have a claim on my measly £25k anyway). He would give me a percentage (doesn't know what exactly) of his teachers pension. (Again, doesn't know what that's worth due to some legal delays apparently, but at 24% each month it would be around £100k I would guess). His proposal is he buys me out of the house, I go with lesser equity and a bit of his pension.

His money is coming from his parents. They are advancing him what he would have as inheritance basically. His mother is a royal PITA and I am worried they're trying to shaft me.

I can see the perks- consistency for the kids and less upheaval (one new home- mine, not two). They stay with some normality, and chats to date are around us sharing the kids 50/50.

What do I need to be thinking about? In my mind, I want my equal 50% equity. If I walk with less equity but a wedge of his pension I have less cash to spend renting or as a deposit on my new home.

Is there anything else I need to be worried about? Obviously going to seek advice from a solicitor but currently this seems too good to be true. He gets the house and keeps costs low, I get equity and also get out. If it looks like... and it smells like...it's probably is?!

How much equity is there in the house and how does he want to split it.

I'd go for the clean break every time. Its amazing how fast a divorce moves in relation to men getting what they want. It seems children and everything else come secondary to that.
If you are having the children more than him then you should get more equity than him as you have to cover childcare.

You need your be mindful that you will probably need the money now so you can buy your own property rather than a portion of his pension in many years time.

I agree with @Tempnamechng in that it's up to him how he wants to raise the money himself to buy you out of the house but I would personally keep the equity from the house rather than a higher portion of pension.

I would just sell the house tbh and each keep pensions and split 50/50 ,UCL ,UCL cleaner

He's sort of pitching it as it would get me the money quicker than selling the house and enable me to go...like I get less out because it's a quicker solution.

I am on board with him keeping the house TBH. It feels a prison to me and it would be good for the kids to have some consistency. I am just wary of the numbers as his mum is driving this and she's a nasty piece of work.

No personally I would want as much equity as possible NOW.

Your salary is decent but prices are crazy so you will still need a good deposit so you can buy something suitable for you and the children.

what happens to the current house is to some extent a moot point (although given your salary I would be inclined to keep the house yourself.
hard to say without specific numbers but a specialist mortgage broker might be able
to sort you out..
There is a huge advantage to not having to pay moving costs and stamp duty on a new place…. That is worth tens of thousands.

if you entertain the exchange of equity for pension, press him hard and stress test the maths twice before you agree

Your right to not attach yourself to the house, let him have it if he wants but this is about making sure you get what you should from it in terms of cash now (rather than as portion of his pension) and a fair price (seek independent valuations).

He is right in terms of it being easier to sell to him rather than opening to the market but you are not giving your house away for peanuts. It needs to be a realistic valuation of what you can get for the house.

Split the equity 50-50 and forget about his pension. You need enough money now to adequately house your children, not the promise of money at some future date. Tell them no.

Can you buy him out? Maybe he would accept less for a ‘quick resolution’.

On his salary and am guessing they are looking to reduce the mortgage by a hefty chunk too as he will not get £320 on his wages alone. If you go by a generous 4.45 x salary that’s a max loan of 183411. He may not get this much if he has debt and 2 kids. So his parents would need to reduce the mortgage to that PLUS give you what you require.

Are they in a position to do this? Because if they aren’t there is no point discussing this as an option. I certainly wouldn’t remain on his mortgage.

MiL will definitely not be looking out for your interests then: proceed with caution!.
How much money does she have? Will she realistically be able to pay you half the equity ( 115 to 150 depending on what you do with pension) plus reduce the mortgage to something he can pay on his salary alone. That could add up to near 300 000. Can she give her some that much? If not this whole plan isn't realistic unless MIL is hoping to shaft you re the equity.

@Baffers100 Is your DH in the Teachers Pension Scheme? If so, he is likely to be affected by the McCoud remedy. Essentially until he retires he will have two figures for his pension, it is only at retirement he gets to pick which option he takes. They are still working on the solution and so this maybe why he can’t get a CETV figure at the moment.

A share of the DB pension is not something to give away lightly when you only have £25k in your own pension. Schemes like the Teachers Pension are known as gold plated for a reason. Just make sure if you do take some of his pension that the financial agreement gives you a say in which option he takes at retirement.

I fully appreciate how having the funds to buy a suitable 3 bed property is your priority now, but in the long term a share of the pension could make a difference in retirement.

Do you think your stbxh and mil have even considered whether he will be approved for the full mortgage by himself, or that his parents will need to help with reducing this too? Is this even a realistic plan?

What is best for the kids? Keeping the family home is a massive bonus. I would work out what you need to buy a new house put that on the table and see where it gets you.

They've not looked in to it yet. The only way the numbers work for him financially is if the in-laws buy my out, and pay off what is owed on the mortgage. They probably do have the money to be honest (they've causally mentioned setting our two up with a £250k trust fund each to dodge inheritance tax...hasn't happened yet).

I think I looked in to whether I could get a mortgage on this place on my own ages ago when I said I wanted a divorce and I think they said no to me too...was well over a year ago though so can't remember the conversation in detail.

Thank you that's really helpful. Yes he is in the Teacher's Pension Scheme.

Further info- in laws apparently are planning on giving me a lump sum. In place of me being on the mortgage, after being removed, either his younger brother or they will join the mortgage.

I won't agree if it's his brother. I don't think it is right he will have a legal claim over what is supposed to be the children's family home, not his business opportunity. (Custody will be 50/50- using family home as it's where they've lives most of their lives).

Likewise if the inlaws are on the mortgage, I'd need something written in to the will to say that when they pop their clogs, the house isn't included in their assets to be carved up to the STBXH brother and his child. Is there anything else I am missing?

What if he moves another woman in with children...the family home at that point is potentially carved up to cater for her kids if he marries her. I know it's a long shot/way off but is there anything I need to think about to protect the kids and their inheritance here?

If you get the funds you are asking for, irs not up to you to caveat what then happens to the home in the future. It's his home, to do as he likes/ wants with. Whilst you'd hope he remained sensible and had it as an asset for his kids, it could need to be sold for a myriad of reasons before then, so I'd probably stop thinking that way. Wither you're willing to be bought out, or your not. That's really the only question

My thoughts are pensions are so far in the future for you both. Neither of you know if you’ll make old age. You don’t know if he’ll quit teaching and decide to work cash in hand for his mates business. I would want an agreement the pensions for left alone and half the house equity. Let his family find the cash and pay you to leave.

I’m not sure you’d get a say in that to be honest. Once he’s bought you out he can do what he likes with the house as it’s his and not yours anymore.

OP you’re thinking of this option because you think it centres the children and if it puts you at a slight financial disadvantage that’s okay, let’s think of the kids.

The problem with that option is what if he doesn’t centre the kids down the line. He remarries, they both go on the mortgage and the asset gets lost through a second divorce or death. You have to be in a position where you can walk away and not be thinking about how he’s managing the house or his finances or his future relationships. That’s why this really doesn’t work for you.

I can't see why you wouldn't go 50/50 on equity and estimated pension figures. But I would suggest for clean break purposes, you get the cash value of the 50% estimated pension figure (rather than a transfer of assets into your own pension), meaning you'd end up with a higher % equity to offset the pension transfer.

I would be very cautious about the idea of his parents giving you a lump sum, all sorts of potential tax implications. He should remortgage using a solicitor to ensure you get paid what is agreed and without any tax penalty. Have done this recently, very straightforward. His parents can give him the lump sum to reduce his remortgage and deal with the 'gift' implications.

I agree with others though, unless the pension deal is watertight and more generous (I have no idea). Just be clear that taking less than 50% is clearly not beneficial to you so why would you even consider it.

50% of equity in the house is needed now rather than part of his pension that’ll be useful later in life. I’d be pushing for this.

Also his pension sounds like it’s worth more than yours so really you should be getting some of this and 50% equity in the house. Basically starting point should be 50:50 on all marital assets but I’d be pushing for 50% equity in the house the most.

I think you are tying yourself in knots over resentments that have nothing to do with the divorce.

It doesn’t matter who he gets the money from. And you cannot negotiate about how you would bequeath an asset that doesn’t exist. And if your ex wants to leave everything to a cat charity that’s his decision.

The fact that his parents can step in and cushion his life is a benefit. Otherwise he would be pushing and would probably get more equity leaving you with a bigger mortgage. In this case the disparity in salaries is far more relevant than the disparity in pensions.

You don’t have 50% equity. You need to stop thinking this is an entitlement. Your far higher income means you can raise and afford a bigger mortgage. If you get close to 50% or enough to buy a suitable property consider taking it.

His family can buy you out. They can also pay for a nasty court battle if this becomes high conflict. You could just be eroding the equity you need to buy.

I am not saying don’t go after what you are entitled to. I am advising you not to creat battles about where the money comes from and non existent inheritance. Dont become fixated about “your 50 %”. What you will get is to be determined and you need to do the work to determine it.

I wouldn’t financially disadvantage myself now for a perceived additional amount in retirement. Especially as there is no info on exactly what that might be. Plus you don’t know he will definitely stay as a teacher and continue to build that pot - he might leave, become ill, leave the country etc etc
I think the inheritance issue is a red herring though. Once the house belongs to your ex, he can do whatever he likes with it. You can’t tell him what to do with his assets at death anymore than he can with you I’m afraid. Ring fencing it for your children is a non starter imo