Separating - should we buy another property?

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Fridayman

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Myself and wife are separated but no agreement yet, still living together with our 3 kids.
We have family home which is in my name only. 400K value 220k tracker mortgage.

We have rental property in joint names.
300K value 150k tracker mortgage.

Neither of us wants to live in the rental property as it will be far from the kids.
We are reluctant to sell the rental property as the mortgage will be finished in 10 years giving us 150k each approx.

My ex has suggested buying a 3rd property for her to live in which we have been advised may be possible. We would get the deposit from family as we have little savings.

I am reluctant to put my name on a mortgage and write away any claim to it (mediation agreement?)when the bank can come after me for missed payments.

I am also thinking that 150k in 10 years from the rental property will be very helpful as I only have a very small pension.
Our incomes are similar at 50k each.

Any advice appreciated.
 
Fridayman said:
My ex has suggested buying a 3rd property for her to live in which we have been advised may be possible. We would get the deposit from family as we have little savings.
Click to expand...

What is the price of the proposed property?
How much is your family prepared to give you for a deposit?

What are your incomes?

Brendan
 
Brendan Burgess said:
What is the price of the proposed property?
How much is your family prepared to give you for a deposit?

What are your incomes?

Brendan
Click to expand...
The proposed property is 320k and our families are prepared to give us 20k each giving us a total of 35k deposit plus 5k fees.

Our incomes are 50k each.
My main concern is putting my name on a 3rd property that my ex will live in and wave any claim to it,yet the banks can come after me for any missed payments.

Are we better selling rental property and buying new one for Ex in her name only and if so would she even get a mortgage.
 
You seem to be focused on the family home and the investment property.

Your first priority is in regards to your children; where will they live, what school will they go to, who will be the primary carer, what child maintenance is required.

You also need to look at other assets and investments including pensions, life assurance etc.

The more you can work out between you, the less your legal fees will be.

Incidentally, it doesn't matter that your home is in your name, it will still be regarded as the Family Home under the Family Home Act, and so you are both regarded as joint owners.

Buying another property without having a JS in place would be a foolish move in my opinion.
 
Thanks for the reply.

Sorry i didn't mention the children as we are already in agreement that they will live 50/50 and attend the same schools they always have.
This is why we both want to live nearby and be there for the children.

We have attended mediation and have most things sorted out.
What ever we decide to do will be signed off with the mediator.
 
4675

With income of €100k, you are not going to get a mortgage of €280k when you already have mortgages totalling €370k.

I presume that the rental property was bought as an investment and not as her home before you got married? In case it was her home before you got married, there is a possibility, that the lender would allow her to move it to the proposed property.

You seem to be getting on very well and have sorted almost everything out amicably so far. While everything is amicable, you should make every effort to separate yourselves financially from each other. Even if that is not the most efficient financially. For example, it is usually a good idea to hold onto an investment property with a tracker, but in this case, you will probably have to sell it. It's just one more connection with your ex, that could be a source of conflict. (Or put it into her sole name.)

After that is sold, she will have €190k and so would need a mortgage of €130k.

That is just about doable.

If your two existing mortgages are with the one lender, it might be easier to do.

Here are the potential outcomes
1) Talk to the lender on the investment property and ask them can you transfer the mortgage to a new property in her name only. They will probably refuse but ask anyway. It might suit them as they will up the mortgage rate by about 1%. The ten years remaining will be a problem as she won't be able to repay it over that term. She will need an extension.

2) If that does not work, ask other lenders if they will give her a mortgage of €130k. They probably will.
If so, sell the rental and she buys her house.

3) If she cannot get a mortgage, then put the rental property in her sole name. Try to get the mortgage into her sole name. If they won't agree, you just have to live with the risk.
You own your home. She owns hers.

She rents a suitable house until she has paid down more of the rental mortgage and has enough equity to buy a house.

You will need to do some adjustment. Even if the rent she receives is the same as the rent she is paying, she will be paying tax on the rent received. You could pay something like half the tax on the rental income to balance things out.

4) Last resort option. Sell the investment property and buy a family home for her in both your names. You should try the other options first. But if this is the only way of getting her a family home, then you have to live with it.

Brendan
 
Leaving the money aside, I think you will have problems getting a joint mortgage on another property when you already have one Primary Principal Residence. You will now have two houses that each of you are claiming as PPR's. The bank will also be unlikely to give a joint mortgage to a separated couple. Your would need to be less than honest on any application you make.
 
Why would a couple who are separating buy a 3rd property?

Surely separation will mean separation of finances too at some stage?
 
Thanks everyone for the advice.

I think Brendan's idea of selling the rental property (plus the extra deposit ) is the best solution for the ex to purchase her own property.
I will have to start again to plan for retirement as that is what the investment property was for. But I understand I am in a lot better situation than some other people.
 
Why not leave the children in the family home they have grown up in, and you purchase another property?

Again I would advise that you have the JS in place before any sale or purchase is done.
 
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