I'm currently going through a divorce and we have had an initial mediation session.
One of the challenges we have is that I currently provide for my wife 100% (she doesn't work). We have around £240K equity in the house and 2 children, aged 5 and 8.
There is around £170K left to pay on the mortgage. My wife had a low paid job when she worked before and she readily admits that there is no way she could take on the current mortgage. I earn £75K a year. We're aiming for a 50/50 custody split so we need to support 2 houses.
After the initial mediation session, my mediator asked me to contact a mortgage broker to determine if it's feasible to take on 2 mortgages. I've contacted a mortgage broker but it simply isn't financially feasible to take on 2 mortgages.
I'm happy to help my wife with living costs (within reason) but I think the mortgage should be in her own name. As I understand from solicitors and mediators, there would be an expectation that if she stays in the house, the mortgage is her own name even if she receives support from me with the mortgage payments.
It doesn't seem feasible to pay the mortgage for a property I don't live in for the next 13 years.
I really want the children to stay in their current home but it just doesn't seem financially feasible. The only way this could be done is for me to support 2 homes but that's a massive commitment on my part.
Given the disparity of incomes, I think a split of more than 50/50 in my wife's favour would be more appropriate.
Has anyone been in a similar situation?
Hi Alex, yes this is a commonly occurring situation when one parent has provided the childcare and the other has provided an income. In this country we have what’s called the law of equal contribution, which basically treats both roles, financial and homemaking, as equal. In these situations, where one person cannot support a mortgage on their own, some mortgage companies will provide a mortgage in your wife’s name. If you go down this route you will need a consent order that states the monthly amount of financial support you will provide to your wife that will be used to cover the cost of the mortgage (plus any additional living costs). This payment is called Spousal Maintenance. Not all mortgage companies will do this, so you will need to shop around and accept you may not get the best deal as the supply is more limited. The alternatives are to either sell the home and split the proceeds in such a way that your wife would be mortgage free, or, she would have a small mortgage that essentially you pay through spousal maintenance (more expensive than option A!). You could also look at what’s called a Mesher style order, where the house remains in joint names until the youngest child is 18 (usually) and then sold and the proceeds divided at a later date. You as the higher earner would continue to pay the mortgage, you would rent yourself for the time being and then the ‘reward’ for waiting for your proceeds of sale could be a slightly higher % split of the net proceeds (provided you are both able to house yourselves).
There are lots of options to explore and the workability of each will depend on the detail of your financial situation. Hope that helps, but please do get in touch if you need more.