Marriage breakdown...how to handle the property

[bruce wayne]

Guys,

My brother and his wife have recently split, and are in the process of sorting out the family home. The following are some of the details

They have two children who spend half their time with each parent
property is estimated to be worth €350K with an outstanding morgage of €290, therfore estimating a potential profit of €60K

My brother would like to buy out his wife from the property and remain in the house. His salary is between €55 and €60K.

He has been paying the mortgage on his own for the past six months and it accounts for approx 50% of his take home salary. He has no other debt (i.e. credit cards, car payments etc).

He only needs approx €30K to buy her out (half the est profit...assuming she agrees). But in reality it would mean that the mortgage would need to raise to 320K or 91% of the value of the property, which I would'nt imagine the banks would lend on a single salary of €55-60K

My question is how does he go about obtaining this?

Obviously his first step should be to his bank to confirm if they will extend the amount and life of the mortgage. Given the current environment what would their reaction likely to be? Would a co signitory on the application help?

any views would be appreciated

 

[jimbobman]

Re: Marraige breakdown...how to handle the property

who says the house is worth 350k. put it on the market and wait for an offer, that is the real value of the property

 

[bruce wayne]

Re: Marraige breakdown...how to handle the property

two valuations put it at that

and I know the true valuation is what someone will pay for it, but you seemed to have missed the point that my brother does not want to sell the property, and therefore have to go with valuations.

 

[jimbobman]

Re: Marraige breakdown...how to handle the property

well he is ripping himself off then if he gives her half of what the valuers say. he is paying over what its worth.

 

[bruce wayne]

Re: Marraige breakdown...how to handle the property

you seem to be missing the point here, but thank you for you contribution so far

 

[jimbobman]

Re: Marraige breakdown...how to handle the property

im not missing the point but surely you think enough of ur brother to talk sense into him

 

[Gordanus]

Re: Marraige breakdown...how to handle the property

property is estimated to be worth €350K with an outstanding morgage of €290, therfore estimating a potential profit of €60K

My brother would like to buy out his wife from the property and remain in the house. His salary is between €55 and €60K.

Obviously his first step should be to his bank to confirm if they will extend the amount and life of the mortgage. Given the current environment what would their reaction likely to be? Would a co signitory on the application help?

any views would be appreciated

He'll probably have to clear the outstanding mortgage and take out a new mortgage. So he'll need 290K + 30K = 320K.

The bank will probably take into account that he'll also be paying maintenance for his kids, so given that his salary is €55-60K and the current mortgage absorbs half his income, it sounds unlikely that he'd be eligible to borrow this. Unless he can borrow over a longer term, can supply a large downpayment (any savings?), and he's in a permanent and pensionable job.

Sorry to be so pessimistic. Is there any particular reason why he wants to stay there?

 

[bruce wayne]

Re: Marraige breakdown...how to handle the property

It's a very pessimistic situation.

Aside from the fact that he really like the house he feels if he sells it he will be in a worse position as he will still need to try and get a mortgage to buy somewhere new. Granted he would have a small lump sum to add to the pot.

I'm not sure how the maineniance issue will pan out as they both work, share the childcare costs equally and have the children an equal amount of time??

Messy stuff.

 

[truthseeker]

Re: Marraige breakdown...how to handle the property

Is there not also some kind of legal issue here though - that even if he buys her out, as his wife under irish law she is still entitled to a share in the family home (as are the kids) so if he sold in 10 years time he'd end up paying her off as well? Or does him buying her out negate that aspect (perhaps she signs away any legal right share as part of that). Perhaps a legal eagle on here can answer that?

How is she going to put a roof over her head - will she rent or pay a mortgage herself? (Maybe she could buy him out - dependant on clarification of legal issue above)

 

[mf1]

Re: Marraige breakdown...how to handle the property

" Is there not also some kind of legal issue here though - that even if he buys her out, as his wife under irish law she is still entitled to a share in the family home "

She will have sold her interest - selling an interest and somehow keeping it makes no sense.

"(as are the kids) "

No - they do not have any legal interest in the property.


"so if he sold in 10 years time he'd end up paying her off as well? Or does him buying her out negate that aspect (perhaps she signs away any legal right share as part of that). Perhaps a legal eagle on here can answer that?"

Correct

mf

 

[Bronte]

Re: Marraige breakdown...how to handle the property

Getting two valuations is the correct procedure. If the wife is amenable this is a good suggestion. Also good for the kids as there will be less disruption. To get around the mortgage, firstly ask the bank if they will agree to the higher mortgage amount in his sole name, if not can he get someone to go guarantor. Alternatively can he come up with some cash himself. If not and the couple are on good terms can they reach an agreement now for the mortgage to remain in her name and pay her at a later date or through monthly payments, although this would be messy. Maybe she would waive her right to the 30K for a certain monthly fee over x number of years. Whatever agreement they come to should be done with a solicitor. That's great they share custody.

 

[Gordanus]

Re: Marraige breakdown...how to handle the property

well he is ripping himself off then if he gives her half of what the valuers say. he is paying over what its worth.

The valuers will give a figure that they think is reasonable for the market at the time of the valuation - what they expect the property to actually sell for. They won't be giving a figure that is in excess of that.

So nobody is getting "ripped off".


BruceWayne, I've PM'd you.

 

[jimbobman]

Re: Marraige breakdown...how to handle the property

rubbish. values always put values on houses that are too high. it would start at that price, get no offers and wudnt be long coming down by 50k. anyone who dosent understand this has no idea whats going on in this country at present

 

[mf1]

Re: Marraige breakdown...how to handle the property

Rubbish yourself! Read the post.

This is a matrimonial situation - in these cases valuers tend to be very cautious given that there may well be a Court appearance involved!

Family law practitioners are also acutely conscious of just how hard it is to sell any property at the moment and will actively encourage settlement by one party purchasing
the others interest rather than ( as is happening in several of my own current cases where the family homes are simply way too big for either party to want to purchase from the other) leave the property to the vagaries of the market.

mf

 

[obama]

Re: Marraige breakdown...how to handle the property

Jimbobman I think your way off here. Yes, it's not the true value of the house at €350k, but he's not selling it. He's paying €30 k to get rid of his Mrs. Bargain

 

[Thirsty]

Re: Marraige breakdown...how to handle the property

Be aware that the family home is only part of the total package; due provision has to be made for the children of the marriage. A judge can (and will) refuse to grant orders if they feel that the children have not been properly provided for.

All married parents automatically have joint custody of the children; sole custody will only be granted by court order on foot of substantial evidence (medical/garda records etc.,) that the other party is unfit to parent. Joint custody does not necessarily mean children spend 50% of their time in each parents house - from a practical point of view it often doesn't work out that way.

 

[danash]

Re: Marraige breakdown...how to handle the property

" Is there not also some kind of legal issue here though - that even if he buys her out, as his wife under irish law she is still entitled to a share in the family home "

She will have sold her interest - selling an interest and somehow keeping it makes no sense.

"(as are the kids) "

No - they do not have any legal interest in the property.


"so if he sold in 10 years time he'd end up paying her off as well? Or does him buying her out negate that aspect (perhaps she signs away any legal right share as part of that). Perhaps a legal eagle on here can answer that?"

Correct

mf

This is not quite accurate - in a marital breakdown you always retain the obligation to maintain the other spouse. There is no concept of a 'clean break' in Irish family law and practice. In theory the partner could be paid off with a share of the family home - blow it all on the horses and come back for a further share/maintenance at a later stage.

This provision only ends with a legal divorce.

I'm not a lawyer....

 

[mf1]

Re: Marraige breakdown...how to handle the property

"This is not quite accurate - in a marital breakdown you always retain the obligation to maintain the other spouse."

I don't think I mentioned maintenance. The question was about the family home.

mf

 

[chrisboy]

Re: Marraige breakdown...how to handle the property

Just a question on maintainance, if she is earning more and everything is 50-50, does she have to pay him maintainance?

 

[danash]

Re: Marraige breakdown...how to handle the property

"This is not quite accurate - in a marital breakdown you always retain the obligation to maintain the other spouse."

I don't think I mentioned maintenance. The question was about the family home.

mf

It is not only related to Maintenance - an errant spouse can claim further shares of assets such as house from which they had already been paid a share.