25k. Buy a house with it?? Advice please

[Whattodowithit88]

I will get financial advice too but looking for some opinions.

Im mid 30s with 2 young boys, been with their dad for close to 19 years now, still together but not married. We used to live in london and moved up north last year so we got a better family home for a lot less money so our mortgage that is in his name only is only 125k. The house is worth 400k. His on the mortgage alone but we are both on the deeds and down as joint owners.

I started work last year after being a sahm and earn around 30k a year. Due to moving up north we also have 25k in savings that is both mine and my partners.

I’m due an inheritance soon of 25k. I work, the mortgage is in his name only, I do own the family property jointly but we are not married. As it’s so cheap up here I could possibly buy a second property (1/2 bed house) for around 75-100k.

Should I invest my 25k into a property and see if I can get a mortgage for the rest of it? Would that be worth it? I know there is extra stamp duty to pay but as the small houses are so cheap it would be less than 3k. Do you think this is a good idea?

Can I also put my partners name on the deeds if I wanted too? or would this then cost more?

House prices are low here but have really risen in the last 18 months so wondering if I should strike or if this is a foolish idea.

Thanks.

Surely just get married and invest your 25k elsewhere.

I’m thinking property would be the best place to invest it and as we are not married I can be nominated as the primary resident to the new property, if we was married I couldn’t do that’s why I was pointing the not married part out.

Where else would you invest other than property? I’m not very financially savvy.

Depending on how much interest he is paying on the mortgage I would either pay 25k off your current mortgage or put the 25k in a high interest savings account. Rates are quite good at the moment. Or even put all your money towards buying a better property for you and your husband to live in.

I wouldn’t be buying a dirt cheap property and becoming a landlord at this point in time. Lots of hassle from what I hear on Mumsnet & elsewhere.

What's your current mortgage rate?

Our current mortgage rate is 2.something percent. It renews next June but even with a 4.5% interest rate the repayments will only be about £550-£650 a month.

If I pay 25k off our current mortgage I loose 12.5k straight away as my partner owns half the house too. I want to make more money with the 25k. If I put it in the mortgage I won’t get the difference in my bank so don’t see that being a wise way to go for my own selfish interest, if you see what I mean.

So are you going to live separately from your partner? I am not sure I understand

Also even though the mortgage is just in his name, I pay towards it too and always have done. There was just no point in me being on the mortgage when it was took out 4 years ago as I wasn’t earning enough to make a difference as I was only on 6kpa.

You really should get married. It will make like a lot less financially complicated.

It really sounds like you’ve made your decision already!

I personally wouldn’t bother becoming a landlord just now, too much effort for little income.

I don’t follow why you won’t pay into the existing home but will happily put your DP on the deeds of a new place?

No I don’t want to live separately, but thought I’m better off investing it into property. I won’t be renting it out or anything as I don’t want the hassle of all that. I just figured the money would grow better in equity than in any other investment? We made 220k equity in ten years in our house in london, I know this house won’t be the same due to the area, but thought property would still be the best way despite the current climate

Well I've learnt something as I always thought the mortgage names had to match the names on the deeds.

If you have been a SAHM how is your pension?

If she gets married the 25 k will then be a joint asset and her dh will be entitled to half.

o/p wants to keep it separate as “her” money, which is why she doesn’t want to pay off the mortgage with it, which again means it gets swallowed into the family pot.

I agree with @EggInANest , review your pension and shove it in there. You’ll get more money as HMRC will add to it.

Yes pension is a good idea! I might add the majority of it to that!

You can’t just buy a property and leave it empty. There will be costs such insurance, council tax and utilities I imagine. An empty property will deteriorate too.

You'll have full council tax, standing charges [at least] for electricity, gas and water. House insurance will not be valid if the property is empty. You risk squatters, unexpected water/fire damage, deterioration of the decorations/ceilings if the house isn't looked after or heated. Garden overgrown/rats Etc. etc. etc

It's a minefield and I wouldn't do it. Invest the money for the long term elsewhere. Do some research.

Are you absolutely sure you are on the title deeds OP?

I wouldn't want to become a btl investor in the current climate, unless you know the market really well and really know what you're doing. I would be tempted to get financial advice and invest in stocks and shares ISAs. You will probably see better returns than with property with a lot less hassle. While you are figuring out what to do put it in a savings account with a high interest rate.

You lose 12.5k straight away? That’s a strange way of looking at it. Surely you have joint money since you are both on the deeds to the house. You apparently share the house so why not share responsibility towards paying off the mortgage? I would be annoyed if I was your partner but that’s between the two of you I guess.

I really wouldn't buy a property and leave it empty. I understand that you want to invest your money wisely, but cheap properties like that are the first rung of the property ladder, and you're taking the opportunity of building a home from someone who needs one. There's a massive shortage of affordable homes in this country, and to deliberately snap one up to use as an investment is morally dodgy.imo.

I’m 100% on the deeds and also had to have a witness when we signed them.

I do pay half towards the mortgage, but if I knock off 25k with my own money then I’m paying more than half without owning more than half, hence loosing 12.5k, as it’s shared.

Thanks for the advice. Think I’ll leave the property and do pension or ISA, depending on what the financial advisor suggests I guess.

Me too. You can't be on the deeds but not the mortgage.

I asked because mortgage companies wouldn't lend on a property where someone not on the mortgage has an interest in the property. I've never come across it before. If you think about it it doesn't make sense - what if they need to repossess it if your husband doesn't pay the mortgage? They can't if you own it too. So that's why it's been mentioned by a few people. Usually if you live in the house but not on the mortgage you would need to sign a document to say you'll give vacant possession in event of repossession.

To flip it round, are you absolutely sure you're not named on the mortgage? You don't need any income to be on a joint mortgage.