Hi, thank you for your question. To confirm, in 2011 you took out a loan with you mother for £170,000 and this covered the full amount of the property?
When was the £165,000 mortgage taken out and for what purpose?
Thank you. Just a bit more information required:
-How old are you both?-How long have you been married?-Do you have any children together, if so their ages and proposed arrangements?-What assets and pensions do you both have (both sole and joint), together with values?-What are your respective incomes?-What is the value of the second property, and what is the outstanding mortgage, if any?-Who is now living in each property?-Whose name is ***** ***** in?
-Is there any formal agreement with your mother regarding the money she has given, if so what are the terms and have you been making any repayments?
Thank you for the detailed clarification. However, the news is not going to be good for you. Given the length of the marriage you will not be able to "ring-fence" assets as yours and his and it is likely that the court will consider all assets to be matrimonial. Therefore the court will consider what both your total assets are worth and what both your total liabilities are, and it is likely that your mother's loan will be considered a true loan given the formal agreement you have in place.
Despite you stating that the first property will be in negative equity, the true purpose of the remortgage was to purchase a new property next door, therefore the actual equity position for just the properties will take into account both values and the total loans - therefore by my calculations there is an actual equity of £165,000 (less costs of sale) in both properties.
You will both need to provide each other with full and frank financial and income disclosure, as well as disclosure of your reasonable needs. The Court's starting point is a 50-50 split of all matrimonial assets and ensuring that both your needs are met in relation to both assets and income. The criteria considered is:1. The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;2. The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;3. The standard of living enjoyed by the family before the breakdown of the marriage;4. The age of each party to the marriage and the duration of the marriage;5. Any physical or mental disability of either of the parties to the marriage;6. The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;7. The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;8. In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.I appreciate that this may not be the answer you would have hoped for but if you found my information provided helpful please could you rate my response positively using the stars at the top of this page as I will not be credited for my response without a positive rating.