Splitting up, ex rushing process,options for house

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Blindsided

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Hi I'm looking some advice. I jointly own a 4 bed house with my wife. I provided the deposit for the property before we got married. House was bought for €365k but probably worth closer €500k now. Approx €260k left on mortgage for 22 years. Repayments are €1400/month split down the middle. I make €72k, she is currently on ~€100k but is quitting this job to set up her own business in January to facilitate a more hands on role in parenting.
We have a child aged 1 who I am the main carer of. I would like to see what my options are as I feel she has already done her research on what is possible for her to achieve with regards to buying the family home. Thanks.
 
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Blindsided said:
House was bought for €365k but probably worth closer €500k now. Approx €260k left on mortgage for 22 years.
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Let's take a simple look at this.

The house is worth €500k
There is €260k on the mortgage
So the total equity is €240k

I assume you did not do any agreement when you bought the house in terms of what percentages you own if you split up, so we have to assume that you own it 50/50.

If you want to buy her out...

1) You will have to give her €120k cash for her share of the equity.
2) You will have to get a mortgage of €240k to replace the mortgage.

Assuming you don't have cash, then you would have to get a mortgage for €350k which you are unlikely to get on a salary of €72k.
 
Of course, the same applies to her.

She is more likely to get a mortgage of €350k on a salary of €100k.
But she will not get a mortgage if she starts a new job.

Brendan
 
You have a good argument that you own a bigger percentage of the house or, at least, that you are due your deposit back.

So let's say you paid a deposit of €40k and that you have split the mortgage repayments since then.

Equity €240k
Less deposit returned to you: €40k
Equity to be split: €200k

So the €240k is split €140k to you and €100k to her.

Unless you have some sort of agreement up front, this argument might be difficult to win, but you should certainly make it but be prepared to concede it.
 
The most likely outcome is that the house will be sold and you will get €120k each.

Then, you should be able to get a mortgage of about €200k and buy a house for €320k

She would be quite close to getting a mortgage for the full amount and maybe, for the sake, of the children, you should facilitate this, even if it sticks in your craw.

Brendan
 
Unless the child would have to move school moving home should not be too unsettling for them at those ages. There will be a long time before they are independent adults so you will want to ensure that in your new home that you have sufficient space to have them over if they don't live with you, so make sure that you consider this. Eg if you are hoping for split custody will you both need to live in the same area to be able to facilitate school, activities etc.

Would your wife have to pay back any paid maternity leave if she resigns now, assuming she has not long returned if at all? Presumably she will need to dedicate more time to building the business so the expected work life balance might take some time to materialise. So be prepared for a potential drop in overall family income without eg a drop in childcare or stress, or ability for you to take on more work if you are working less in the home. And of course it will impact on any potential mortgage. TBH if separating and with kids that young the timing seems very bad to set up a business. In her shoes I would be hoping for stability in work (better the devil you know) and security of income if this was going on.
 
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If you continue to be the main carer there is an argument for you to stay in the family home until the youngest is through college. Could you take on the €1400 mortgage yourself? Then when the kid is grown sell the house and give your spouse the €120K equity they would have in it.

Your spouse may want to rush because she can get mortgage approval while she is currently working, but you need to consider where it is best for you and the child to live.
 
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Thanks Brendan. Yea I'm not sure her thought process behind any of it really. Everything seems to be on her terms. That's really useful to know about the potential mortgages though, thank you
 
Has she put a proposal to you? Or come up with any ideas?

She would need to do so if she wants to rush it through.

Brendan
 
She's offered to buy me out for 100k or I can buy her out. But she's just plucking numbers out of the air as far as I can tell. Even if her business does take off with this minimal effort that she is planning would there not be a longer waiting period for a self employed person to get mortgage approval?
 
Brendan Burgess said:
you did not do any agreement when you bought the house in terms of what percentages you own if you split up, so we have to assume that you own it 50/50
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If the couple are married, this is the Family Home & property is deemed to be jointly owned.

The family home is only one aspect, pension adjustments, child maintenance also have to be looked at.

The entire process could easily take two years; don't expect anything to happen quickly.
 
Blindsided said:
She's offered to buy me out for 100k or I can buy her out. But she's just plucking numbers out of the air as far as I can tell.
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She is not too far off.

Brendan Burgess said:
1) You will have to give her €120k cash for her share of the equity.
Click to expand...

Is she saying that you can buy her out for €100k either?
So the €240k is split €140k to you and €100k to her.
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If you are in a position to do that, then you should go for it.

Brendan
 
Sorry Danny

Could you explain your disagreement?

If it's because it's "too quick", then I would say, grab it while it is going. She might change her mind. And these always lead to stress, so the quicker the better, assuming the offer is reasonable.


Brendan
 
This couple are married & have a child.

The family home is only one aspect of the settlement. Pensions, savings / other assets, child maintenance are all part of the package.

In order for one party to buy out the other, at the very least they need to enter into a legal separation; but if there is any contention a Separation Agreement is useless if not backed by court orders. That leads us to judicial separation and / or divorce.

Children's welfare comes first; this isn't just a property transfer.

As far as "changing her mind" goes - there are no favours here, the OP & their spouse have legal rights and responsibilities.
 
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OK, I see what you mean.

The house is likely to be the biggest part and the most contentious after the custody issues.

So if the ownership can be sorted and their new living arrangements can be sorted, and it's all done on a fair basis, I would be a big advocate for doing it as quickly as possible.

If they are living apart and the ownership is sorted, then they will find it much easier to deal with the other issues.

Brendan
 
Clamball said:
If you continue to be the main carer there is an argument for you to stay in the family home until the youngest is through college. Could you take on the €1400 mortgage yourself? Then when the kid is grown sell the house and give your spouse the €120K equity they would have in it.
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If one parent is really the main care giver then their housing needs are more tied to the child than the other parent but it's reasonable for both parents to expect to provide suitable accommodation for their child.

Clamball said:
Your spouse may want to rush because she can get mortgage approval while she is currently working, but you need to consider where it is best for you and the child to live.
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Yea, that all seems a bit strange. There's no way setting up a company requires less hours than working for someone else so, for at least the next few years, the mother will be around less. Then there's the mortgage application. How does she expect to pay it when she isn't earning anything? @Blindsided, are there savings and/or investments that you haven't mentioned? Is her new business being funded by someone else? Has she already set it up? If so then there's a case that some of it is yours.
 
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