Hi everyone.
I'm currently in the process of separating from my wife, and I'd like some advice on how to proceed financially. There is a small chance we could work things out but I have to proceed on the assumption that we can’t. That being said there’s currently no acrimony so hopefully we can come to a mutually beneficial arrangement without paying to bring in the lawyers and losing everything.
Here’s our situation:
1 year, 6 months ago we bought a free standing three bedroom house with a pool on the north side of sydney for $620,000. We did this with the assistance of my wifes family who lent us $30,000 towards the deposit/fees. There was no expectation of this being paid back in the short term, and could possibly of been written off as a gift. With the current situation it is important to my wife that the money is paid back although the family have said it’s not a priority.
Our mortgage currently stands at $531,000. The home loan we took was a 30 year owner occupier loan with a five year interest only period included at the beginning (5 + 25). Our interest rate is currently %4.99 variable.
My wife can’t afford to buy me out, but would like to stay living in the house, renting a room out to cover the costs. Even if I could afford to buy her out I wouldn’t want to live there alone, and would probably rent elsewhere and look at it as an investment property.
Comparable properties in the same area attract rent in the area of $600 per week. This means there’s a currently a deficit of $336 per month that we’d need to put in to over the mortgage over the full period (although I’m assuming rent would increase to cover this over time).
I would expect that we can come to an arrangement where we split 50/50 any maintenance or value adding improvements. And also that either can put in extra money to bring down the mortgage for an equivalent increase in ownership on eventual sale / rental once it’s all paid off.
Selling the house now according to my estimates gives us $20,000 to $95,000 after fees and paying back the family. potentially not much, but a clean break.
We’re both in our early thirties and have no children.
I earn $120,000 including super, with no other savings or investments. She earns roughly $95,000 with no other savings or investments. We’ve always had a joint account and pooled everything although she had more saving than me when we met (no idea how much but would guess in the order of $20,000). I don’t think any of this should come into things but you may.
Holding onto the house leaves the door open to working things out, but I’m under no illusion that this probably won’t happen, and that things could get complicated if/when circumstances change for either of us (want to buy a home with a new partner etc).
What I want to know is:
Is it advantageous to hold onto the house and joint own as an investment property.
What are the implications if she still lives there, subletting out one or both of the other bedrooms.
What home loan changes should be looking at to make any of this possible.
Are we better off just selling and starting again from scratch (assuming we get nothing from the sale).
Does anyone here have any similar experience that they want to share things that I haven’t thought of.
Thanks for reading all this. Hope you all have a great 2014.
I'm currently in the process of separating from my wife, and I'd like some advice on how to proceed financially. There is a small chance we could work things out but I have to proceed on the assumption that we can’t. That being said there’s currently no acrimony so hopefully we can come to a mutually beneficial arrangement without paying to bring in the lawyers and losing everything.
Here’s our situation:
1 year, 6 months ago we bought a free standing three bedroom house with a pool on the north side of sydney for $620,000. We did this with the assistance of my wifes family who lent us $30,000 towards the deposit/fees. There was no expectation of this being paid back in the short term, and could possibly of been written off as a gift. With the current situation it is important to my wife that the money is paid back although the family have said it’s not a priority.
Our mortgage currently stands at $531,000. The home loan we took was a 30 year owner occupier loan with a five year interest only period included at the beginning (5 + 25). Our interest rate is currently %4.99 variable.
My wife can’t afford to buy me out, but would like to stay living in the house, renting a room out to cover the costs. Even if I could afford to buy her out I wouldn’t want to live there alone, and would probably rent elsewhere and look at it as an investment property.
Comparable properties in the same area attract rent in the area of $600 per week. This means there’s a currently a deficit of $336 per month that we’d need to put in to over the mortgage over the full period (although I’m assuming rent would increase to cover this over time).
I would expect that we can come to an arrangement where we split 50/50 any maintenance or value adding improvements. And also that either can put in extra money to bring down the mortgage for an equivalent increase in ownership on eventual sale / rental once it’s all paid off.
Selling the house now according to my estimates gives us $20,000 to $95,000 after fees and paying back the family. potentially not much, but a clean break.
We’re both in our early thirties and have no children.
I earn $120,000 including super, with no other savings or investments. She earns roughly $95,000 with no other savings or investments. We’ve always had a joint account and pooled everything although she had more saving than me when we met (no idea how much but would guess in the order of $20,000). I don’t think any of this should come into things but you may.
Holding onto the house leaves the door open to working things out, but I’m under no illusion that this probably won’t happen, and that things could get complicated if/when circumstances change for either of us (want to buy a home with a new partner etc).
What I want to know is:
Is it advantageous to hold onto the house and joint own as an investment property.
What are the implications if she still lives there, subletting out one or both of the other bedrooms.
What home loan changes should be looking at to make any of this possible.
Are we better off just selling and starting again from scratch (assuming we get nothing from the sale).
Does anyone here have any similar experience that they want to share things that I haven’t thought of.
Thanks for reading all this. Hope you all have a great 2014.
