Seperating and buying a new property

[Wideawakeandcountingsheep]

DH and I will probably be seperating in the next year or so and are trying to work out the best way to afford 2 homes. 3 DC will be will be with me most of the time and DH EOW and possibly 1 night per week.
Rents here are really high and although he really needs a 3 bed DH would like to buy a 2 bed flat rather than rent a house.
Currently have 170k left on mortgage and house is worth approx 250/260k. Fixed term comes to an end towards the end of next year and we have a loan with a high monthly payment that will make things tight for both of us.
We're thinking about remortgaging to pay off the loans (around 15k) and also release maybe 10k for DH to use as a deposit?
Is this even possible, would it be mad to do it?
Any advice welcome please!

Forgot to say he will still contribute to the existing mortgage (a quarter) and any maintenance and will retain his share of the equity. The flat would be solely his.

And he is the higher earner by around 20k

You will get in a real mess trying to make arrangements like this yourselves. There’s many possibilities of where this can go wrong - please see a solicitor and get it done legally.

Thank you I know we would need some legal advice before going ahead but just at very early stages and wondered if something like this was even possible. Things are very amicable - at the moment, i know that could change!

It feels like your finances will stay very entangled. If it works for you that's ok, but there are a lot of situations that aren't unlikely and could make the whole thing go wrong, that's why courts usually want a clean break.

1. Would he even be eligible for another mortgage? If you're already fairly extended with your existing mortgage, and don't have a large deposit for a flat, it's not that likely that he'll be able to borrow more.

1. Even if you can, or if he rents but keeps contributing to the mortgage, what if he finds someone else, or you do, it all becomes a bit less amicable and he no longer wants to pay?

1. What if one of you loses your job, or can't work for health or care reasons?

1. What happens when you sell, how will the shares of equity work out?

I think you should talk to a mortgage broker first to see what is even possible, and if you do want to do this, you really need to spend some money in a solicitor to get a good agreement sorted to minimise the risks.

Thank you, some really good points to think about.
Maybe I'm being a bit naive as things are ok between us now.
Another option would be to sell and split the equity but id rather not leave the family home if possible.
I don't see a problem with him renting, at least short term as he would still be building equity in this house. It's just the difference between rent and mortgage repayments are so big

I appreciate that everything seems amiable now and that’s great. But the problem is that after a split, people’s feelings and / or circumstances can change very quickly.

Men, especially single dads, often meet a new partner very quickly. Sometimes then they want to have their kids 50:50, so they don’t have to pay child support and they have another woman to care for their kids.

And of course they pay less child support anyway if she has kids.

Others go the opposite way and decide to not see their kids anymore , or at least not have them overnight, because it’s too hard in a blended family.

Or they decide to move aboard and want their equity out the house.

Now I know you are reading this @Wideawakeandcountingsheep and thinking that your STBX will NEVER do that because he loves his kids so much. And that you are smarter than all those other women that happened to, who were clearly idiots who married a bastard.

I’m afraid that they all thought that too. No one marries and has kids with someone they think will do this in future. But sadly many many of us do.

So I’m saying that you can’t rely on his promises here. Get everything done legally and try to get as much of a clean break as possible.

I have the same issue with rent and mortgage - the rent on a nice 2 bed around here is more than the mortgage on our good-sized family home, but we also don't want to sell and then both end up in small places, me with 3 DCs most of the time. There's no perfect answer, unfortunately, unless you can move to a cheaper area.

@IM0GEN definitely food for thought

@OverTheRubicon it's so frustrating isn't it.

Definitely don't want to move areas but maybe if we negotiate on the equity split then selling may be the best idea.

Sorry to be such a pessimist. But I think you should hope for the best and plan for the worst. It would certainly be madness to take out a loan secured on your ( and your kids ) main home to buy him a flat in his own name.

If he defaults on the loan ( and you can’t pay it alone ) , you and the kids are homeless but he’s secure in his 2 bed flat.

You need to divide up the marital assets as much as possible so if he makes poor decisions it doesn’t ruin your life. Don’t give him ( and his new partner who may hate you ) so much power over your life.

BTW you don’t mention pensions in your financial calculations. How much do you both have ?

@IM0GEN very useful to think of it that way.

Don't know actual figures on pensions as I've been in the same employment for around 20 years with a reasonable pension but was part time for 8 years when we had the DC. His previous pensions probably were not as good but has always been full time and has a decent pension now. His earning potential is much higher than mine due to taking on the bulk of the childcare.

Also he's been able to pay off student loan while I'm still paying mine.

Most people’s pensions are AT LEAST as much as the equity in the house. I think you will be surprised.

Last person I said this to on MN assured me that her husband had only a small pension, probably the same as hers. Turns out it was £450k.

@IM0GEN

Most people’s pensions are AT LEAST as much as the equity in the house. I think you will be surprised.

Last person I said this to on MN assured me that her husband had only a small pension, probably the same as hers. Turns out it was £450k.

To add to this point - many older women will also tell you how they bitterly regret giving up a larger share of the pension for a larger share of the house. It can seem the better deal in the short term, but it's not necessarily. You really need to get full financial disclosure and a solicitor.

I think the biggest practical issue is @OverTheRubicon ‘a point (1).

It sounds like you’re not planning to take over the current mortgage yourself? I’m guessing he’s not a massively high earner, because if he was and you were £20K less you’d still both be in a good position and not talking about this.

So I don’t see any way that he’s going to get a second mortgage, sadly.

Can you raise a mortgage on your own?

Honestly, I would think very carefully about just deciding he gets to carry on building his career whilst you do the childcare. There’s a trade off there within a marriage as you share his success... until you don’t 😕 I would be looking at your own financial future here - whether that’s ensuring that he pays towards childcare (separate to maintenance) or making sure he does some week days - not just swanning in later in the evening for tea after you’ve had the disruption to work of pick ups.

Thanks everyone, really good advice.

@Cocomarine you're right, and it's one of the reasons the marriage is not working at the moment.