Releasing equity to buy second home

[Minkyscamp]

My husband and I have finally decided to separate after many years of talking about it. I’m a full time carer to our two autistic children (they don’t attend school). He works full time.

We are both really keen to try and keep our current home for the kids until they much older. We have been considering remortgaging to release some equity to buy a small second home nearby for my husband and for me to stay in the current home with the kids.

We’re thinking of buying it jointly, so that all assets are still jointly owned, as we don’t have the capacity to apply for divorce or work out the finances just yet. We plan to do this in a couple of years. We will then informally decide how to split my husband’s income so we can try and live independently of each other.

is this wildly unrealistic? Or a bad idea for other reasons? Neither of us have the mental space right now to work out divorce/a clean break option. And there are no rentals nearby (we live very rurally). We just need a solution for the next couple of years that allows us to live separately, but for him to be close enough to see the kids regularly without too much travel for them.

Any insight from those who have been through this process would be very welcome. thanks

Hi there. Sorry, it sounds very difficult for you. How much does he earn? How much equity is in your property? How will you support yourself and your boys?

I think plans like this work till one of you meets someone else and the dynamics change
It does sound as though your relationship has run it course rather than any great fallout

but with a setup like this nether of you can move on you are both still financially tied and dependent on each other

@KimberleyMilkadoHe earns 140k. We have 425k outstanding on our mortgage which we switched to interest only when I stopped work. There’s around 325k equity. We were thinking of trying to increase the mortgage by 150k so that he can buy a small place near us.
We should hopefully be able to afford to run both houses on his income (albeit at different living standards to now) and continue the support for the kids. At the moment the finances are worked out so everything goes into different pots for mortgage/bills/etc when he gets paid. I assume we will tinker with that system but that it will continue in a similar way.

I don’t know if this is a silly idea. I do genuinely hope that we will continue amicably with the kids best interests at heart. But I appreciate lots of people probably start off with those intentions.

thanks for your help.

@rwalkeryes we’ve been talking about this for years, and I genuinely think it will be amicable. You’re right - it will mean we’re still very tied financially, but I am completely reliant on him for income to support me and the kids. The only ways we can see to separate cleanly now would be to sell the family home, and we are hoping to avoid that for the kids’ sake.

it sounds like you would be relying on his good will and that’s a level of trust I wouldn’t be comfortable in. He could change his mind at any time and want his equity. Perhaps there is a way to achieve what you want with a legally binding agreement of some sort.

Relying on his one income to share with you is totally unrealistic.
I guarantee this won’t happen long term

you need to look to a way to become financially independent from him / yes that means splitting assets and him paying cms and possibly small amount if spousal but simply saying he’ll continue to share his salary when you live in separate homes ….especially as and when he meets someone else… nope that won’t happen

you’d be better to severe assets and work out a settlement , becoming financially independent of each other

also note that spousal maintenance directly impacts benefits

And honestly I don’t think you can afford it - you’d have 600k mortgages on interest only - that’s about what 1600 a month ( with no capital being paid) , two lots of council tax and utilities and bills etc on a netvsahary of around 7k. Honestly I don’t think the maths stack up. And what if he loses his job? The market is terrible out there

I don’t mean to sound like Debbie owner but personally I would not agree this.

better to sell, split assets, arrange cms and claim benefits

If you live rurally... Do you have a big garden or land attached. Is it possible to put up some sort of summer house in it, one of those temporary, large buildings people use as summer houses /bunk rooms? And have that as a separate living space? A lot of them now are actually big enough, so then you could sort of have some sort of nesting arrangement with the kids, where you take it in turns to care for them?

I can't see the other option of buying a smaller place nearby and releasing equity as going to be affordable.

As others have pointed out, you are then completely reliant on your other half supporting you after you've gone your separate ways.

Why is this arrangement only for a couple more years? Presumably if your children are not in school upon turning 18 they’re not going to be independent either? It sounds like the rural life isn’t a reality and retaining this lifestyle is going to throw more money at an untenable situation?

Hope equity options are pretty much universally understood to be poor value.

What happens after "the next couple of years"?
What is your medium - long term plan? I think that will be the key. If you're going to be moving towards financial independence in that time then fine. But if your kids are going to need lots of support beyond that it's different.

Will he be seeing the kids in your house? How will you feel about that?

I feel like the financials could be the least of your worries really.

Can you not hold out a find a rental? Spending money on rent would surely better than the expense and risk of buying and additional property? Im also rural and there is very little choice but id be willing to wait until the right thing came up rather than spend money and be tied to a purchase.