Arthritic Toe
Well-known member
Question for someone who might know about these things...
My partner was divorced a few years ago and the arrangement with her house was settled on the basis of what I've discovered is known as a 'Mesher Order'. In other words, she gets to live in the property until her youngest child is 17, at which point the property must be sold and profit of sale split between her and her ex-spouse with some specified percentage. What I'm trying to figure out for her, is how the 'profit of sale' is defined, and where the mortgage fits into it. Here is the scenario - figures are very approximate.
They initially bought the house in 1998 for 100,000 - with a mortgage of 80,000.
In 2008 they remortgaged. House value was 200,000, the mortgage (interest only) was for 130,000
In 2014 they divorced. Mesher order issued, which is triggered in 2023. Profit of sale to be split (lets say) 60/40 in her favour. She pays the mortgage.
So come 2023, lets say the house is sold for 400,000 and lets say there is 140,000 outstanding on the mortgage.
It doesn't seem to me that the outstanding mortgage would be the factor that determined the profit - for example she might have been overpaying it (she hasn't) - and in that situation, it wouldn't seem fair that her overpayments (or underpayments for that matter) should affect the amount he gets.
To my mind, the profit should be calculated based on the 2008 house value, i.e. the point when the last mortgage was started. For this example - the profit of sale would be 200,000.
Is there anyone out there who knows about these things that could shed a light on how this 'profit of sale' value is calculated?
Thanks in advance.
My partner was divorced a few years ago and the arrangement with her house was settled on the basis of what I've discovered is known as a 'Mesher Order'. In other words, she gets to live in the property until her youngest child is 17, at which point the property must be sold and profit of sale split between her and her ex-spouse with some specified percentage. What I'm trying to figure out for her, is how the 'profit of sale' is defined, and where the mortgage fits into it. Here is the scenario - figures are very approximate.
They initially bought the house in 1998 for 100,000 - with a mortgage of 80,000.
In 2008 they remortgaged. House value was 200,000, the mortgage (interest only) was for 130,000
In 2014 they divorced. Mesher order issued, which is triggered in 2023. Profit of sale to be split (lets say) 60/40 in her favour. She pays the mortgage.
So come 2023, lets say the house is sold for 400,000 and lets say there is 140,000 outstanding on the mortgage.
It doesn't seem to me that the outstanding mortgage would be the factor that determined the profit - for example she might have been overpaying it (she hasn't) - and in that situation, it wouldn't seem fair that her overpayments (or underpayments for that matter) should affect the amount he gets.
To my mind, the profit should be calculated based on the 2008 house value, i.e. the point when the last mortgage was started. For this example - the profit of sale would be 200,000.
Is there anyone out there who knows about these things that could shed a light on how this 'profit of sale' value is calculated?
Thanks in advance.
