We are thinking of separating but by husband is wanting to stay together miserable rather than face \"financial ruin\" as he puts it.
We have several properties and i wonder what you guys think would be a fair way of splitting everything up that is fair (as far as you can!)
We would, in an ideal world, want to keep the properties we already own, apart from me , the wife, having the fmh.
I would also want a bigger percentage of the assets as i would have the kids the majority of the time and he earns 4 times more than me. I gave up a career that could have seen me earning more than twice what i currently earn and i could not go back to it given the time out, and not with young children. I dont know what is \"standard\" or what would be fair percentage wise, 60/40 or 70/30? He is able to earn much more than me obviously, unencumbered by childcare issues.
So, here is the info i think is required.
Paul is 50 and Eliza is 44. Married for 12 years.
Two kids, boy of 12 and girl of 5
Paul has three other kids, two of which he pays CMS for (approx. £500 a month) and the other, voluntary contributions for Uni.These kids will all be over 18 in 4 years time.
Income: Paul , Full time employed, around £80K and Eliza, part time self employed, around £20k
Eliza, when separated, probably entitled to around £370 a month child tax credit
FMH – worth around £500k, mortgage of £340k
Owned by tenants in common, 4 bed house, Eliza wanting to stay here with kids
Belonging to Paul
Prop 1 – Worth £176k, Mortgage of £124k , rented out
Prop 2 – Worth £122k, Mortgage of £77k, rented out
Prop 3 – Worth £324k, Mortgage of £234k (3 bed, suitable for Paul and kids, currently rented out, not making a great profit currently)
Belonging to Eliza
Prop 4 – Worth £190k, mortgage of £142k , currently rented out
Pensions – Paul – £116k and £25k
Pension – Eliza – £11k
Two cars and motorbike in Pauls name worth around £12 in total
Paul has credit card debt of around £30k. He would (mostly correctly) argue it is joint debt for cars, holidays etc. (Money has been kept separate in marriage)
Cash – Paul has around £6-10k , varying at any time
Eliza – looks after and is the only person to have saved £10k in kids accounts, plus has also around £10k
What do you guys think might be a fair solution please?
First Question is can you afford to live in the matrimonial home with a mortgage of £340,000 and income of £20,000?
What would be your total monthly outgoings to live alone with the children at the matrimonial home, including the mortgage repayment?
What rental income is received from each of the properties and who receives the rental income? over and above the monthly mortgage repayment.
What is your occupation as self employed and how many hours a week do you work. You say you can't go back to your previous occupation, do you mean ever, even when your youngest child is a little older?
What assets are you wanting to keep and what do you want to let go?
What is the plan with the rental properties?
If you keep them the income from them it may reduce your entitlement to benefits. If you sell them the money released could reduce debt on fmh.
How much are you earning from self employment? If you are doing 20-30 hours per week and the £20k includes your rental income are you working for less than the minimum wage?
How will you pay mortgage on fmh if you have a period without tenants in rental property?
FMH is four bed and you only need three so are technically over housed. Maybe sell FMH and live in property 3? You've already said it is suitable for kids and not making much money so use equity from FMH to reduce mortgage on that?
Where will your ex live. He will need a residential mortgage so if already on mortgage for FMH and paying CM he may struggle to get a mortgage.
What would your incomes be without the rental incomes?
As it stands it looks like you have about £395k in property equity how far would this go to housing each of you if you liquidated it all and divided it so you each used some plus your respective mortgage raising capacity to buy a suitable property?
At the end of the day, the courts would want to achieve a fair and just settlement, where both the husband and wife's needs are met and any minor children of the family. The first consideration is to ensure that the children and the main carer have a home, and then that the husband has a home. If there is enough capital then it is possible for both the husband and wife to have a home. Other factors include income and future earning capacity and borrowing capacities.
So,yes you are correct that a mortgage company would not agree to a transfer of the fmh to your sole name with your husband being released from the mortgage on your income, with a mortgage of £360K. From the information you have provided, your maximum earning capacity is likely to be £30,000 in the future so there does not appear to be any realistic prospect of your being able to get consent from the mortgagees in the foreseeable future.
So if this detrimentally affects your husband's capacity to get a residential mortgage as WYSPECIAL says he already has maintenance obligations which will increase once you divorce/separate, so his mortgage capacity will be limited in any event, then a fairer solution could be for all or some the assets to be sold and for you and your husband to buy properties with a percentage share of the realised sale proceeds and available mortgages based upon mortgage capacity.
In addition, whilst you say you could pay the mortgage of £600, what are your total income needs each month, with all the bills, the children's needs, and your needs, what is the total monthly figure.
What is the total disparity in incomes, once your husband's maintenance for all his children is deducted, including liability for your two children, what would be your husband's income be without the rental income. What is your income with your benefit entitlement and
If your husband still had a residential mortgage capacity and was able to purchase a property then the circumstances of your case would be different and other options for settlement could be looked but again dependent upon all the circumstances of the case, not just the figures there is no set mathematical formula, only guidance in s25 Matrimonial Causes Act 1973 and guidance in relevant case law.