Question on divorce and equity

[buymeabar]

Hi All,

Currently going through a fairly amicable divorce (ish). A question for the masses: Say if we have 150k equity in our house at present, which leaves us both 75k if we sold today. She wants to buy me out and continue to live there, but she can only raise 40k. Could I/we possibly do the following:

- she gives me 40k so I can move on, put that as deposit down on a place of my own. I come off the mortgage for the old place.

and

- as I'm effectively leaving 35K equity in the house, can I have something legal drawn up that means in 5 years time she sells up/remortgages etc and gives me 50% of the equity in the house at that time (minus the 40k I've already have)?

The thinking behind this is that we can both move on, but as she's a little tight on cash I effectively lend her some money for a time (the 35k that she can't afford to give me yet) and my 35k is still working for me as the value of the house she'll be in gains value.

Is this a good idea, and is it feasible? Things I'm thinking about are: what happens in 5 years time if we have fallen out? Can I have an interest registered at the LR for 50% of the equity at time of sale etc.

Any advice would be greatly appreciated.

PS: Yes there are kids involved but we're taking care of those separately and we've already agreed finances for them.

[buymeabar]

Thanks all, appreciate the feedback.

- Will get a solicitor involved. I was just wanting to know what we're thinking of isn't pie in the sky stuff.

- Funding: she's borrowing from family so they're not bothered if there's to be a charge on the property.

- On sale: if she's giving me 40k for my part of the equity, when she does come to sell or remortgage the house in 5 years' time, we're being specific that she doesn't give me the remaining 35K, she's giving me 50% of the equity on that house at the time of sale, minus the 40K that she's already given me.

Cheers again. Will investigate a solicitor now. Part of me did think that it's a ballache rather than simply selling up now and splitting the equity, but I'd like my kids to enjoy this house which has only just been extended and done just how we wanted it. Plus, to some extent, my money is working for me. Yes I'll have to live in a more modest house for 5 years, but then I get to blow the money on an RS6 or something (or maybe be more sensible)!

[buymeabar]

ging84 said:

I can be almost certain you are both not in agreement over that, it seems completely unfair, either you've not thought it through or you're a total shark.
Why do you think you should get 50% of the uplift on a house you have a minority stake in, and no liabilities, is have no idea. But this agreement would give 50% of any capital your ex wife repays from the mortgage, how you can think you are entitled to that is mind boggling.

Ha, well we've discussed it and she seemed fine with that idea (for now - as others have said that might change).

I really must be a total shark though as how dare I try and help her stay in a house that she'd struggle to get a mortgage for otherwise, especially when the cause of the breakup was her banging someone else. If she's wanting help, I want to get something out of it as well or I'd have just demanded we sell up right now.

[buymeabar]

Rude-boy said:

Step one - investigate mortgage availability for the sort of debt that the Mrs will have to take on. If that is workable then one of you needs to take full advice and report back to the other (assuming all amicable still!) and then you can agree on matching instructions to your respective advisors.

Do not:-

1. Fail to get proper paid for and insured legal advice.
2. Fall out any more than is absolutely necessary - I have seen 'happy' divorces turn sour over the most silly of things to the detriment of all.
3. You will both need independent legal advice but that does not mean that you can't both get your plans in order with one of you seeing their solicitor and the other instructing later in the day once the deal has been agreed. This will only work if point 2 is followed and you are both 100% open and honest.
4. Chances are that, if she will have PR for the kids, if the deal is less than the absolute maximum SHE can get her solicitor will let her know all the many wide and varied ways your balls could be nailed to a wall for all eternity. This is were you will really find out who you married as some turn and some say words to the effect of "I hear what you have said but I am happy with the deal we have agreed and I just wish you to confirm that it is legal and to put it into effect legally. I will not be paying you for any attempt to up my share, nor are you instructed to pursue that course of action."

Bottom line - get proper legal advice, but make sure what she can do before you even think of paying money out backing a non starter.

Thank you, busy getting all that in hand.