My partner divorced his ex W in 2018 but finances negotiations have been ongoing ever since. She lives alone in the 3 bed FMH and pays the full mortgage and there are no children. An agreement was reached, draft Consent Order sent but now she has asked for him to pay half of the mortgage if she finds a rental and moves out prior to a sale, but my partner cannot afford this as he is having to service the marital debts which were all in his own name and needs a new car as his is on its last legs, not to mention having no furniture and having to start from scratch (rental is unfurnished).
FMH is to be sold with 50/50 given to each from the proceeds of sale after costs of sale and marital debts paid off. She had 7000 savings at the time of form E in 2018 but says she has spent it on the mortgage. The only asset apart from the house is her car which despite having no finance outstanding is not listed.
The sweetener for her is the pensions have been valued on the CETV of 2018 on a capital basis rather than on equalisation of income (hers is a NHS final salary pension) and no actuary report has been made due to cost. Would it be fair to say the 25% tax free lump sum of around £12000 that she will be able to access in the coming few months could be used to pay off the mortage (£13000 left) or for ongoing payments rather than her asking for more?
Everything has stalled now as she will refuse to move out unless my partner shares costs on an empty property and therefore the FMH cannot be put on the housing market. The option is to go to court, get the pension actuary report based on equalisation of income but this is daunting and costly or sit back and wait for the mortgage to be paid off in the next 2 years when my partners income will reduce due to retirement and try and negotiate afresh.
Chances are she will just stay in the house until sale goes through if she can’t afford rent as well as the mortgage potentially slowing it down.
If you partner does contribute he will get some of the money back when the house is sold as the capital outstanding would be reduced.
How much more does he think he will get if the pension is revalued? Balance that against the time, cost and effort involved plus bear in mind his ex could argue for more of the house having paid the mortgage for the last three years.
How much is the mortgage? Could it go interest only or mortgage holiday?
There is only £13000 left on the repayment mortgage and the equity is around £160000 after costs of sale and marital debts paid.
Why could she ask for a bigger share of the house sale? That is a big worry. However my partner paid the mortgage from separation in September 2017 until divorce in November 2018 plus all FMH household bills for 5/6 months, at the same time paying his own rent and outgoings and servicing the marital debts. Could he claim all of the loan repayments and interest on the credit card debts back too? They shared mortgage costs for 4 months then she paid full mortgage since April 2019.He could move back in to the fmh if she moved out, saving rental costs, but he does not want to go anywhere near.
During negotiations which started in late 2018 she never mentioned a need to find a rental prior to sale, we always knew she would not move out until she had her own property and so there would always be difficulties matching up sale/buying dates. My partner wants to avoid an ongoing payment from income so suggested paying half mortgage and half FMH bills for a set period of 4 months, giving her enough time to find a suitable property, but his solicitor said he could not offer that, it had to be agree to her ammendments or refuse.This would have cost £1000 mortgage costs and around £200 for bills (if council tax was not charged on an empty property).
Its difficult to know how much my partner would gain on the pension without getting a report done on an equalisation of income basis but we need her agreement to do that and there would be a cost for both parties.So far my rough calculations of her NHS final salary pension based on 28 years service when she retires at 67, 1/80th of her current £20,000 salary, worked out as £7000 per year, which is higher than my partners. So i'm assuming they would at least cancel each other out. My partner had hoped the current deal, which gives her around £50,000 and which she could draw out as a 25% tax free lump sum immediately would be enough to see her through any moving costs as monthly income is tight.
I've still no idea how to move this forward and don't want to miss out on the current housing market as property is selling quickly.
My partner is going to make clear to his ex wife that she can access the 25% tax free pension lump sum already offered and use that for any housing costs if she chooses to move out of the FMH before a sale. Hopefully she will have an incentive to accept offers on the fmh in order to preserve as much of this lump sum as possible.
He will also explore the possibility of a payment holiday, thanks for that idea Wye Special.