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That''s a great idea.
Good luck with that plan.
It may be that selling the house is not an option right now. The children need a home. It may well be a cheaper option than renting providing she can afford to run the property.
Selling and downsizing is unlikely to be an option as neither of you would be able to get a mortgage as things stand. You may end up with a share of the equity - but won''t get it until say the youngest is 18
The incomes you mention are very low but presumably you can get tax credits which will boost it? Could you also get a student loan or hardship grant?
I should imagine there is also likely to be nominal spousal maintenance partly on the grounds that once you finish University you will be getting a full time job and if she needs more help, you will be in a position to provide it.