seperating but how can I afford to keep my house?

[shifrabest]

I’m feeling very stuck and looking for practical advice on options when going through a separation, untangling 20+ yrs of marriage. Especially as we have 2 dc, a huge mortgage and all financials are equally shared... on the positive side, we want to resolve things amicably and move forward in a way which has the best interest of our dc, short and long-term. The background is this:

• 2 dc, one entering the last year of GCSEs. The other is slightly older.
• Despite the mortgage, there’s enough equity in the house to potentially provide down payments for two small flats if we sell.
• The house is likely to increase in value in the future but needs urgent renovations. I have been waiting for years to go ahead with the project which for several reasons was never a priority, especially not of DH. The project is likely to cost just under £100k, but this will make the house 'complete', warm (which will also reduce bills) and resilient for many years.
• Our finances are equal, with similar incomes and joint accounts/savings. We’re both self-employed, but I haven’t earned an income in a few months. I expect to return to full employment soon, earning around £100k annually.
• We agree that short term, he will move out and rent a flat nearby.

My questions:

1. How can I keep the house, afford the renovations, and manage the household expenses and bills in the short term?
2. If I stay in the house with DC, what would be a fair way to split the household expenses, including the mortgage? Should he contribute, and if so, how much? With the need to rent a place for him, we’ll struggle to cover the costs of two properties.
3. Long-term, how can I keep the house and eventually buy my partner out? The urgent need to improve certain things, in particular the kitchen, complicates this option.
4. If I fund the renovations myself (through a loan or family support say), how should the added value be calculated in the event of a future sale? In this case, I believe that an increase in value due to renovations should not be an equal split (assuming he is not going to contribute a penny to finance the project).

Ultimately, I want to ensure the house remains for the kids in future as it is a valuable asset.

I’m struggling to find a clear path forward and work out the maths of all this! I also struggle imagining myself in a tiny 2-bed flat, which will be the only thing I would be able to afford. Over the years I have invested much money and love in the house and garden, mainly my work and vision, but mostly I know that it will be fullish and regrettable to walk away from the asset.

I appreciate any help and advice on this! Thank you in advance.

You will need to take over the mortgage payments and you ex wouldn't be expected to pay. He will pay maintenance if not having the children 50.50 you are not going to get any benefits if you earn £100k, but the mortgage shouldn't be an issue unless you need to borrow more than £400k or there abouts.

The reality is you will both have less money as running two homes will be more expensive. I think the normal thing is to either sellup and both move on or one of you buy out the other. To be honest it doesn't seem fair if you keep the house for anything more than to give you time to sort things out while expecting him to rent a small flat so he can subsidise you.

I'd buy him out before spending lots of money on renovations so that will be one complication gone.

1. You would need to buy him out to keep the house and give him his % of the equity back. Mortgage to do this.
2. If you stay, he’s not expected to contribute a penny.
3. You need a mortgage to buy him out, in your own name, same as point 1.
4. If you fund the renovations yourself while still married then it is all still a marital asset and 50/50 split when you do separate.

The only way you keep the house is to get a mortgage and buy him out. If you do that, get divorced, and then do the renovations then any profit is obviously yours as you 100% own the house. If you do the renovations while married and still 50/50 on the house then any profit or benefit is 50% his.

thank you@Iwasafool . This make sense if it was an affordable option in the short term. To buy him out I will need to give him c. £200k! If this amount is added to the mortgage, I will not manage the debt alone, including all the bills etc. which are a significant add-on amount. I may have some inheritance money from my parents but not for a few years. I think that will be my only chance but money is not here now and not guarantee how much.

What about pension pots btw? Are they taken into account at all in divorce?

@Doggymummar thanks for this but as above, its the affordability. And when you say maintenance, do you mean 50% of all the outgoing except fo the mortgage?

Unfortunately we can all only have what we can afford and typically we can afford less when we get divorced. I know I had to downsize but for me it was worth it and I didn't regret it.

No, it means unless he has the kids 50% of the time he would have to pay you child maintenance. Check the calculator to see what that would be but it won’t be 50% of your outgoings.

Your expectations are unrealistic as far as I can see. You will get maintenance. About 18% of your ex's salary. But its something you need to work out between you. Your ex will also need somewhere to live, brought or rented.

I wouldn’t hugely factor maintenance into your calculations as if your youngest is 15 it will only be paid for another couple of years anyway.

Your post is all about what YOU want. In some ways the reasons for the split aren’t relevant, but it comes across as trying to manipulate the finances so you win and he loses out.

I know it's a bit weird but some people do the "nesting"thing, ie rent a flat and keep the family house, take turns to stay in the flat while the other parent takes turns staying in the family home with the kids.

Continue to halve all the bills for both sets of running costs.

It would take a very friendly couple of exes to make tat work but just mentioning in case it could be relevant as that way you get to both keep the house for longer while both seeing the kids and finances are only increased by whatever the flat costs.

£200k in equity each is not a deposit on a small flat it is a significant financial position to be in - I would sell the house , buy two smaller properties and just focus on that. An expensive renovation while adjusting to single parenting sounds a nightmare

But remember only normally til each child is 18. Sounds like your eldest is close to that.
and obviously you’d get proportionately less if the kids spend any nights per week at his place.

If you stay in the house you could look at changing your mortgage to interest only for a couple of years while you get back on your feet financially.

You could also perhaps request not to sell the house till both DC are finished with school at least, so they can have a stable environment during that time.

I'm sure others will have better suggestions but the mortgage thing is what I did and meant I could stay in the house. Settlements seem to have changed in the last 12ish years though so that may not be an option for you.

given you have teens would you be willing to take in lodgers or exchange students? If so this might improve the affordability

You need to get individual legal advice, and financial too (so you can see what you can afford going forwards, eg size of mortgage).

Get the house valued now (get 3 done and get the middle/average figure as the working assumption)

If you want to stay, you will have to buy him out. Continue to ignore the need for renovations - they'll have to wait.

Pensions do go in to the pot (as do other significant assets) and it might be possible, if there is a big discrepancy to negotiate a greater share of the house to you in return for not taking a share of his pension. You need to find out what each pension is worth, if similar in value, then obviously it will make little difference.

It might make most sense to sell up and each of you buy/rent a property you can afford. This might mean moving to a cheaper area. It sucks, but is a very normal consequence of moving from two to one incomes.

What you cannot do is sit on a considerable sum of his money (ie his share of the equity) other than for a brief transition period whilst the admin of the split is being sorted out.

What you can each leave to your DC if/when you die doesn't come in to it, so the assertion "Ultimately, I want to ensure the house remains for the kids in future as it is a valuable asset" carries no weight at all.

Thanks but I don't think that's what's going on.

Thanks. Yes, we thought about it. And we are friendly. I think I would hate the moving around every x weeks. We also thought about buying together a second flat where he could live while I stay in the house with the kids for at least the school years. Then we take it from there.. but that is a bit risky I think..

You are right I need to be reminded how bonkers it is.

Interesting idea. Thank you. I will look into that though our mortgage deal is ending 2027. Fix until then and we have a super rate so would not want to remortgage early.

Sensible advice. I don't disagree and I may need to start getting use to the idea of moving