Mortgage Raising Capacity request

As part of the divorce process I have been asked to provide an illustration of my Mortgage Raising Capacity.

While this is relatively straightforward, my experience in divorce thus far is anything but that.

In my mind there are two approaches to this exercise. The first a straight forward illustration highlighting what I can afford based on my salary, deposit etc..

The second though is what I'd deem to be a more real world situation based on what I actually am willing or likely to want to borrow. For example, I may not want to max out my borrowing against salary and have a majority of my monthly take home going to a mortgage. Instead I may opt to save more and take out a smaller mortgage.

Of these scenarios do you advise please on whether what they are ultimately after, and is there a pro and con to either in terms of what I submit to them?

Thank you

It would be unwise to get a quote based upon the absolute maximum you could borrow if you stretched yourself to the utmost. No-one can be expected to live with no margin of error. 'Reasonable' mortgage capacity is what is required which builds in some room for unforeseen events.

ok thank you David for the clarification. This was my assumption but again nothing in these process seems logical. Not in my experience to date.

Thanks

There is nothing logical in an English divorce.
If you have a good income you will be punished.
You have higher mortgage capacity and therefore you need less assets and can borrow more and pay the high interest of today.

Would have been better to have been more lazy in your career during the marriage.

>>There is nothing logical in an English divorce.

There you are completely wrong. The whole Common Law system is based on reason. If you read the judgement in any case it is always closely argued and reasoned. Judges must give reasons for their judgements. That is what the entire system is based upon. That is totally unlike the Civil Law where judges are often mediocre because they are usually professional judges and civil servants rather than lawyers who have risen to the top of their profession.

You clearly take the view that if English law does not agree with you then English law is an ass. After all, your basic argument is that that you have X wealth and that if you get married you should be entitled to keep X wealth. Well, you are entitled to your view but English law disagrees with you and if and when the situation arises it will give its reasons for disagreeing with you. Many people could, of course, simply take a broad view and say that if marriage is not a partnership then what is it? As has been said before, you do not have to get married if you do not like the consequences.

to someone from abroad it is just unbelievalble that a system like this exists.

Even if I got married abroad, had a prenup abroad, lived abroad, there is always a chance that the English law that I ABSOLUTELY disagree with bites me in the ass one day. So it is an ass, I agree.

How some English judge comes and feels it is in their right to overwrite a foreign prenup and shuffle around foreign assets is just seriously insane.


not only I disagree with the English law, the lawmakers all over the world disagree with it. Hence it is the place where people go forum shop because of how outstandingly "generous" it is to the weaker party.
I dont feel like you appreciate this point enough, from an international perspective MY VIEW that premarital assets stay with the person who brought them in is absolutely the standard.

and to an economist and mathematican (who is trained in logic) it is clearly absolutely illogical that assets earned before knowing someone should have nothing to do with the marriage.

I serisouly cant believe how someone can not see that this is in fact illogical.

Yes, it is crazy (in parts) but it is what it is and YOU can’t do anything about it.

But say the boot was on the other foot, can you seriously say, hand on heart that if your ex wife to be came into the marriage, which is a partnership, with a couple of million and you arrived with one twentieth of that, lived in a million pound house that your wife paid for, that you wouldn’t be hot footing it to England to get a fair share of the marital potin a divorce if you could? I’m guessing not.

You are talking If’s and buts here. You obviously don’t want to share your wealth with your wife to be, and that is your prerogative, and there is a way to 100% make sure she doesn’t get her grubby hands on it and it is a simple as not to marry her, but good luck explaining that to her.

BTW I’m bored now.



Edited 2 time(s). Last edit at 07/27/2023 06:42PM by Andyk.

>>MY VIEW that premarital assets stay with the person who brought them in is absolutely the standard.

Frankly, no-one really cares what your view is. Like Andy I am bored with this. English law treats assets acquired before the marriage as non matrimonial BUT, and this is a very big but, unlike you and inflexible rules of law elsewhere (which similarly have inflexible rules about who will inherit your property and many other things) English law approaches issues pragmatically and always gives detailed reasons for its decisions.

Say, for example, you bring your wealth of £1.5 million into a marriage, you keep it in your sole name and you do not share it with your wife in any way. Say, then, that you remain married for 15 years, you have two children, your wife gives up her job, stays at home to look after the children, you live in rented accommodation, build up no more capital and then you split. Are you seriously suggesting that it would be fair in such circumstances that you walk away with your £1.5 million leaving your wife and children with nothing? I think I know what your answer to that would be. However, I can assure you that English law has more sense and would ensure that wife and children were properly provided for even if that meant using a significant proportion of 'your' assets.

Other systems of law may be so inflexible as to be unable to deal with this type of situation but English law is not.

There is one other final point. If, say, I lived in Thailand and expressed the view that not being able to criticise the Thai monarchy was anachronistic I would be referred to TIT ('this is Thailand') by every Thai. They are so used to aspects of their country being criticised by foreigners that they have a name for it. And, needless to say, they don't like it as I dare say you would not like it if I lived in your country and told you how terrible it was. There are some circumstances where most people regard silence as the wiser policy.

I have left England, quality of life is terrible (at least compared to where I am now), and the divorce law is another major reason as it is frankly insane. I am really glad that I left and I think after brexit many will follow.

I note that I have paid more taxes than most during my time in England.

The issue is that even leaving England is not enough to escape that insane law, hence my criticism.
I left England, I disagree with the law, I just want it to leave me alone now. But even that is not possible

There may be spousal maintance in the case you desribe, but yeah pre marital assets of course have nothing to do with the relationship. The extent to which those assets are "shared", as in someone who contributed zero to them gets more than half potentially in the case you desribe, is not only insane to me, it is insane to lawyers all over the world.

You write yourself:
"In UK divorce law divorce advice for men is about managing expectations."

You highlight an important point, I dont think most men actual fully understand the contract they enter in England (they should really get legal advice mandatory first). Hence your advice is to "manage expectations", i.e. they will lose way more than they would ever thought of or a normal person would consider fair.

Your webpage is actually good, very eye opening. You are one of the sources that put me off marriage the most.



Edited 4 time(s). Last edit at 07/28/2023 11:11AM by Randomer4040.

@David in relation to some of the comments here I had a question to my current case. My wife has discovered that her NHS pension is huge. This was a surprise. So now her solicitors are trying to exclude the pre-marriage and post-separation periods. She is also pursuing ongoing maintenance despite no children but a long marriage. It's a case of throwing as many 'illnesses' at the wall as possible to see what sticks - and post separation and as the divorce nears is taking more and more time off work. The reason is meant to be disability but its conveniently come about the same time as the divorce proceedings. The reality being it's anxiety and depression based.

Irrespective my solicitors seem to think she has a chance at getting a form of maintenance from me - she is seeking ongoing until she retires. My logic and faith in law and/or humanity hopes a judge will see through the absurdity of it all and put things right instead of 'ruining' my future life.

All I'm after is a clean break to move on. My concern is by flagging the disability or illness card they will use as a bargaining chip for me to buy her out and extract more money from me in order to end this. I am by far the higher earner but also plodding along in a high pressure income job because I have no alternative at this stage. The divorce is costing a fortune, she is in the marital house, I have no access, and am being ordered to pay x towards it monthly until this settles. The final pFDR is nearing thankfully (we hope the last stage unless it goes to trial).

My solicitors are pushing for her pension to be included pre and post. Partly because I've also had to pay £90k+ in rent, as well as keeping the house mortgage payments going. She has not contributed one pound to my rent and I can see of course that is just the way it is.

Do you feel the courts will include or exclude the pre and post marital assets? We will be presenting both sets of data to the judge. Honestly I don't even care at this stage and just want it over, whatever the outcome. My primary concern is to severe ties with a clean break but she I feel will use the ill health card to make me settle for a large departure. Does the judge have the power to force the clean break?

Courts have a duty always to consider whether there should be a clean break. Bearing in mind that there are no dependent children and that your wife works it is very likely there will be a clean break. Having said that, these things do depend upon the figures rather than upon abstract principles. Also, again subject to the figures, it is quite possible that capital might be divided unequally in your wife's favour if there is to be a clean break. That will be because, for instance, of things like her lower mortgage capacity although it is difficult to be specific because you do not give figures and figures are what matter.

thanks. yes the expectation is there may well be a substantial departure from parity on the equity front. I have x 3 her base salary but on the other hand she has a very sizeable NHS pension to draw down on. Across the board the combined assets are circa £1m (pensions, home equity, savings etc) so my sense would be there is sufficient funds allocation to where any case for sustained maintenance is leaky at best. That logic applied it's still not stopping her trying to pursue spousal maintenance on the basis of numerous 'illnesses' that miraculously only appeared post separation and in the midst of divorce

Cheers as always

>>Across the board the combined assets are circa £1m (pensions, home equity, savings etc) so my sense would be there is sufficient funds allocation to where any case for sustained maintenance is leaky at best.<<

'Across the board' may not amount to much. As I said before, the outcome very much depends upon the figures and how the assets are split across various classes. You cannot house yourself with a pension. There could be a very different outcome if the £1 million assets were in fact £800,000 pension and £200,000 equity compared to,say, £200,000 pension and £800,000 equity.

Yes, the classification is really dragging out but hoping at the next pFDR it can all be addressed once and for all.

Her pension (£450k)
Her savings (£0)
My pension (£100k)
My savings (£250k) *effectively my pension but with the divorce situation everyone is arguing how to class this
Home equity (£450k)

Lot of tax implications but that's pretty much it. There was a lot more £ pre-divorce proceedings - £100k+ but solicitors have eaten that up and still going.

Thx

If the £250K are savings then your pension amounts to £100K and the £250K is capital. Fortunately your wife's pension is a lot higher than yours so in principle you should be entitled to a pension sharing order in your favour. Ignoring any premarital pension (because you say this is a long marriage) total pension assets are £550K so you should be entitled to £175K of her pension to equalise pensions. That is a VERY rough calculation and there are various ways of doing it but that will be sufficient for present purposes.

No doubt your wife will want to keep her pension. That is all very well but on these figures it seems obvious that you are entitled to a pension share. This gives you some leverage. Basically I assume you will be saying (I certainly would), 'You want to keep your pension. OK, so what do I get in return for letting you keep your pension? I want want a clean break'. I do not think on these figures your wife can realistically expect to keep her pension AND have ongoing spousal maintenance from you. The quid pro quo for her keeping her pension intact should be a clean break for you. If your wife insists on spousal maintenance it should be made plain to her that you are entitled to a pension share and that is what you will seek if she insists on ongoing spousal maintenance.

This aligns with my legal representation and reaffirms my thoughts on the situation. I appreciate the feedback.

Thanks

David Terry Wrote:
-------------------------------------------------------
> >>There is nothing logical in an English divorce.
>
> There you are completely wrong. The whole Common
> Law system is based on reason. If you read the
> judgement in any case it is always closely argued
> and reasoned. Judges must give reasons for their
> judgements. That is what the entire system is
> based upon. That is totally unlike the Civil Law
> where judges are often mediocre because they are
> usually professional judges and civil servants
> rather than lawyers who have risen to the top of
> their profession.
>
> You clearly take the view that if English law does
> not agree with you then English law is an ass.
> After all, your basic argument is that that you
> have X wealth and that if you get married you
> should be entitled to keep X wealth. Well, you are
> entitled to your view but English law disagrees
> with you and if and when the situation arises it
> will give its reasons for disagreeing with you.
> Many people could, of course, simply take a broad
> view and say that if marriage is not a partnership
> then what is it? As has been said before, you do
> not have to get married if you do not like the
> consequences.


I have to disagree? or agree? i'm not really sure anymore. The reality is that the rule of law should be flawless! it (should) be the absolute! However...we place "judges" in a position of authority. These are people, who have flaws. They have good days and bad days. If you are in court, and your lawyer/barrister identifies who the judge hearing your case is...they will know...that is a "good" judge...or perhaps a "harsh" judge. It isn't right that the opinions of the individual sitting in a chair can make a difference to an outcome. It should be based on fact and nothing else!

I of course "speak" from recent experience in both civil and criminal courts. I also laugh at the mere mention of Blackstone's Ratio! Our system does not work!!!

>> The reality is that the rule of law should be flawless!

Oh, please. We are on Earth not in Heaven. Nothing this side of Utopia is flawless.

English law is unpredictable.
One judge might see it this way the other one another way.
They just reshuffle your assets around as they please.
Absolutely unheard of in the EU.

No, they do not shuffle around assets as they please. They operate according to rules and reasoning which every judge must give. You just don't like how that might operate in your case. That is all.

And please don't get me started on the EU. How exactly does one vote out an MEP when they are selected on a 'list' system? How many years ago was it that the EU's accounts were approved by the Court of Auditors? And can the so called 'European Parliament' make laws? No, because all laws are brought forward by an unelected EU Commission.

And if you want to specify any particular EU country I dare say I could quickly point out some of its faults such a forced heirship system. Just name a country. England and the Anglophone countries can easily stand favourable comparison with any EU country. Germany seems to top the list of star EU countries. Although you wouldn't know it from the BBC Germany is actually in recession and it is a country where you risk being berated if you are rash enough to cross an empty road at anything other than a zebra crossing with a green light flashing.

Just name your EU country and we'll see how it actually compares.

The way the judges interpret the rules can vary significantly. I am not saying everything in the EU is better or anything. Just simply divorce law in england is a ridiculous outlier in the world.

There are 27 countries which are members of the EU. There were 28 until the UK left. The UK is an 'outlier' in leaving the EU. So what? This country makes its own decisions and its own laws. Just because 27 other countries are content to have an unelected EU commission make laws from them that doesn't mean that one country which thought otherwise was wrong. It is the same with everything else including divorce law. You disagree with English divorce law. So what? There are reasons why English divorce law sometimes takes premarital assets into account and when it does it gives reasons. You may not like that but anyone who looks at it objectively can see that there might be circumstances where the sort of inflexible rule you advocate could lead to injustice. You don't mind that injustice as long as you keep 'your' assets. The courts here don't agree with you and neither do I.

England does, incidentally, adopt the same approach in respect of its constitution and much else. We do not have a written constitution unlike almost every other European country. New problems are solved pragmatically as and when they arise.

my main annoyance with this discussion is the following:

the English divorce law in a situation like mine leads to a gross "injustice". You dont seem to see it, you are an English lawyer. But it is just obvisouly clear to a mathematician, to an economist, and to lawyers in basically EVERY SINGLE OTHER COUNTRY.

You dont agree with me, but almost all of the world does agree with me. It is basically quite likely that what I consider "fair", is in fact fair when almost all courts in the world see it this way. You are invested in your system, I understand that, but I find it hard to understand that you dont seem to grasp the quite obvious concepts that lawyers and people all over the world seem to agree with: stuff before marriage should not be touched and that you dont acknowledge that the outcome in England is arguably quite unfair in a case like mine.


Perhaps there are one or two situations where a flexible approach would lead to more justice, I agree. But in general the approach in England in practice is far more likely to lead to an injustice. It is not that pre marital assets are touched only in exceptionally circumstances, after 10 years they are basically always put in one pot (as my very expensive English lawyer explained- and understood how that is quite unfair).

The interpration of "needs" is just unbelievably generous. How can it be that of 1.5M pre marital assets, someone "needs" 60%, when that puts them at probably the top 10% of wealth in England. How can that "need" be so high that it overrides ownership. How can there be a "need" to be in the top 10%. I dont understand how an intelligent person who looks at this from the outset doesnt understand how insane this is.



Edited 1 time(s). Last edit at 08/05/2023 03:49PM by Randomer4040.

In general my experience with England is that you are really the dumb one to be working hard and building something:

-50% chance of losing most of it in a divorce
In my case likely lose evdn more than I started with, how insane is that.
-quite high taxes like in the EU but unlike in my beautiful EU country you don't get much for it:
Still need to pay for private school.
Still need to pay for university fees.
Laughable unemployed benefits.
Health care extremely bad.
Child care costs astronomical, not paid by state like here.
You may have drug dealers on benefits living in the same building as you. In that building you had to buy the flat for 800k gbp while they live there for free..


The list goes on.
Generally great place to be living off other people, but a bad place for a working person.



Edited 1 time(s). Last edit at 08/05/2023 04:12PM by Randomer4040.

Thankfully I left England. My annoyance is that the insane divorce law could even follow me.

Frankly, no-one cares what your opinion is. You are invested in your own situation and looking at the matter subjectively. There are good reasons why English divorce law sometimes has to take premarital assets into account in the interests of justice. There is nothing 'insane' about that. It is much the same with prenuptial agreements. Sometimes the English courts will take them into account and give them decisive weight. On the other hand, if the circumstances justify it (such as many years having passed and circumstances having arisen which were never thought of let alone provided for in the agreement) the English courts will readily override such agreements. To most people this would be common sense but I guess you would think the English courts are 'insane' about that too.

And, as for enterprise, one of the reasons people come to the UK is the flexibility of the jobs market. I don't know if it is still the case but you used to have to pass a 'postman's exam' to become a postman in France and entry to all other jobs had (have?) similar restrictions. In the UK a Frenchman is CEO of Astazeneca, a Turk the CEO of Rolls Royce etc etc. Look at the boards of companies like Bosch or Danone and look at the names. Macron had a hissy fit when the EU even thought of appointing a very well qualified American as a minor bureaucrat.

The UK has more unicorns than any EU country by far - more than Germany, more that France. (Before anyone thinks I have gone bonkers an unicorn in this context is a privately owned company worth more than one billion dollars. They are usually very successful start up companies).

Now, since you have spent so many posts doing down this country do us all a favour and tell us which 'beautiful EU country' you inhabit. I can't think of one of which some scathing critique could not be made if approached with the same mindset as you approach England.

I have to agree with Randomer and not just because of the divorce law. England has become a terrible place to live, especially since Brexit but as someone who was too young to "buy at the right time" I've spent most of my adult life paying taxes to bail out other people and their house prices! When my children are old enough, I'm taking a one way ticket out of here.

Specifically on the divorce law, of course it is nonsense. It's unpredictability does not serve ordinary people who cannot afford solicitors. The general guidance now is avoid court because 50% of something is better than 60% of nothing. Also, it is so heavily focused on need that it destroys natural justice. When a hoodlum crashes his boy racer car into yours, a judge doesn't award him damages because he "needs" another one. So why when the weaker financial party refuses to work all their life and then has an affair is it possible for them to "need" more money than they could ever have earned themselves?

However, we have to understand family law is a closed world. Those in it believe in it, either because they designed it or because they profit from it. To the rest of us it is absurd, whether the earner who is fleeced or the scrounger who cannot believe their luck. There will never be any reform because the solicitors within this world depend on the uncertainty and the ridiculous levels of discretion for their livelihood. Perish the thought that Family Law could go the way of Land Law which demanded that title to land was registered with HMLR for a registrable event since 1990 and reduced the complexity (and fees) of conveyancers as unregistered land became more and more rare. The solicitors will never allow something like that to happen again.

I just don't understand how you can say things like:
"For most people it's common sense to override prenuptial agreements".

When all over the world to everyone it is common sense to give individuals the option to enter binding agreements to manage their own affairs with regards to their finances. It is certainly the case in the rest Europe and the US. So it seems the world agrees with what I consider to be common sense. The definition of common sense would be what most people would consider to be the right and just thing to do. Most people of the world agree with my view, hence it must be the common sense.

Do you not see my point of view at all?

>>When a hoodlum crashes his boy racer car into yours, a judge doesn't award him damages because he "needs" another one. So why when the weaker financial party refuses to work all their life and then has an affair is it possible for them to "need" more money than they could ever have earned themselves? <<

The difference between the two cases is that in the latter PARLIAMENT has decided that needs are important and a factor that courts MUST take into account. The judges are applying an ACT OF PARLIAMENT. If you don't like it then write to your MP.

And only a fool would say that all Acts of Parliament are perfect and that everything is for the best in all possible worlds. Obviously laws can be legitimately criticised. However, there are things you can blame judges for and there are things you can blame Parliament for but the two are different.