Can I use STBXH'S equity to secure new mortgage?

[SpiderManMum]

Hi, this might be a silly question but I had 30 mins free legal advice with a family solicitor and he has left me with more questions than I went in with!

DH left me 5months ago and continues to pay the large mortgage on our martial home where I continue to live with DS (5yrs). I am likely to begin divorce proceedings and ex has said he wants the house sold ASAP as he wants rid of the large mortgage (fair enough) but also wants his equity.

I gave up my full time career 2 years ago to work part time self employed. As such I cannot afford to cover the existing mortgage on our family house. Solicitor hinted that there may be a way of DH helping me to get a much smaller mortgage on a new property in agreement for selling the house. Does this sound right? Any idea how I could do it? I assume it would mean using his equity to pay back when DS is 18?

I'm really worried about being forced out of my home into rented accommodation with no chance of securing a mortgage in the future.
Thanks for any advice.x

You are married it isn't "his" equity it is both of yours plus he may find that he is obliged to help house his ds - he can't assume a 50/50 split of the equity.

It entirely depends on how you split the marital assets, and if you can't agree a judge will do it for you.

The house is sold, the mortgage repaid and the legal fees for the house sale are paid, the remaining equity is split between you.

You can then use your portion as a deposit on your new home with DS. You need to make it clear to STBXH that you need X amount in order to buy a house with a mortgage of Y. (Whatever is affordable for you). If he doesn't agree take it to court, but be aware that if you involve a solicitor you may end up with a much larger % of a significantly diminished pot.

We did it without lawyers, so at least we had the full equity ourselves rather than giving it to a legal firm.

Sorry, it's a horrible thing to go through, even when it's amicable.

Random mess is absolutely correct, you will be entitled to more than 50%, I think it's usually more like 60-70%, or even higher depending on your needs.

Thanks for the advice and yes it is bloody horrible. Just getting back on my feet after a bit of a breakdown and only now feeling ready to start thinking about what is going to happen to me and DS.

He has said that he will be reasonable regarding finances and doesn't want to involve courts which is fine now but actions speak louder than words. My main worry is that even with 50% equity split, it isn't going to be enough to secure a mortgage. I take it he doesn't have to help us in that case?

Sorry but the 50:50 thing is the starting point. If you get any more it will be through negotiation.

What can happen tho is that you defer the payment of some or all until either ds is 18 or you remarry.

I think.

Yes he can't leave your and ds homeless as you sacrificed your career to look after your son.

If you get 70% equity would that be enough for you to get a mortgage?

If he only hot 30% equity would he have enough to get a mortgage?

That is how the judge looks at it.

Or he could give you (for example) 80% equity with the agreement that you pay 20% back when ds is 18 or you remarry (that sort of clause has a special name)

I know it's very worrying, but stay calm and talk to him. You are only going to be asking for what is reasonable and fair, if he's said he'll be reasonable you might be okay.

Do you know exactly how much equity is in the house and a rough idea of what you will need? Start there, and see what kind of split that would give him.

If he is a high earner with a pension then you can ask for more of the equity immediately and offset it by agreeing to a clean break, no spousal maintenance and not to claim any of his pension. Effectively you get more "up front", but cannot go back in the future for more money (except child maintenance).

Thanks so much, maybe the solicitor was referring to the 'more equity now but to pay back in the future.'

Ex is a high earner (75k + bonus) and I earn 20k. Sadly with the fall in house prices i fear we will be lucky to get 60k equity out if we manage to find a buyer that is. I get the feeling that ex is chomping at the bit to buy something for himself whilst the going is good.

It doesnt help that We're in expensive home counties where a 2 bed terrace starts at 200k! Just to give you a chuckle though, ex said that he wants an agreement that I am not allowed to leave our home town with DS even to seek employment otherwise residency will get transferred to him!
luckily the solicitor was able to put my mind to rest over this! X

Please ignore any blustering from him about ever getting residency of DS, it just wouldn't happen.

If the smallest houses in your area cost £200k, and there's only £60k equity in the FMH then even if he gives you the full equity there still seems to be a shortfall, I don't know what mortgage you could get on a salary of £20k, but I think £140k would be pushing it (and repayment a large proportion of your monthly income).

Could you move somewhere more affordable? Or work full time? (I know it's difficult with a young child).

Hmmm perhaps you need 90% equity and spousal maintenance so that you can afford a home!

Agree with random mess, you need to push for spousal maintenance to be able to afford to buy a house.

I think going back full time really is my only logical option. Such as shame as means paying out for after school clubs and holiday care which is the main reason I gave up my job in the first place so DS wasn't being passed from pillar to post.

But realistically I don't have the choice anymore. Even rent on a 2 bed will be £1100 per month. Really don't want to move unless I can really help it as DS is having so much change to come to terms with without moving schools as well.

Nobody said life was fair and by god do I know it!

Well don't start divorce proceedings, the fact he wants to sell and you move out etc, that is your bargaining tool to get a fair financial settlement.

He has an obligation to help house your ds until he is 18.

Let your STBX to have ds 2 days a week after school and let him sort out the childcare for those nights and alternate weekends...

Have you already put in claim for CTC as a single parent, council tax benefit etc?

Hi there... my solicitor said that STBXH cannot force me to sell the house as its only a 2 bedroom bungalow and not too big for our requirements. (if we were in a 4 bed say, he could force a sale). If house owned in joint names, its 50/50, but if you remain there with the child it should be maybe 70/30 maximum my solicitor said.

I put a lot of capital into my house, so Im hoping X will walk away with as little as possible, certainly no more than the capital that he has paid off in the past 6 years.

My solicitor said that whatever is agreed, X will have to wait until DD is 18, or I remarry, or sell the house before then. So he is looking at waiting 14 years. he will be 62 by then, so it wont do him much good will it.

My financial advisor has managed to get me a mortgage of £88K in my sole name, thats based on £20K income (which includes maintenance, tax credits, child benefit and my self employed income). Sadly it is harder to get a mortgage on a self employed income as its not guaranteed.

£88K would cost around £450 a month and £105K would cost around £550 a month. (I currently pay £700).

Good luck with sorting it all out, this is the nasty side of things. But once its done, its done. Im yet to find out what my X is expecting to walk away with...

Every case depends on the particular circumstances. There are various ways your husband could help you rehouse. He could have an interest in the new property in the form of a chargeback which is paid out when the youngest child reaches 18 or finishes university, the mortgage could be in joint names or your husband could pay spouse maintenance. When spouse maintenance is included in a court order settling finances lenders may take it into account as income when calculating the amount of mortgage they are prepared to give you.

However, divorce settlements depend on the overall circumstances and any assets (including pensions) held in sole or joint names need to be identified and valued before anyone can say what would be a fair settlement and how you should be housed.

Agree with STIDW. OP - you need to bite the bullet and pay for some comprehensive advice.