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.

[afterdropshock]

You can't get a mortgage on an empty property as you can't get insurance on an empty property and you can't get a mortgage without insurance.
I don't understand losing £12.5k by paying off a mortgage. Well I see what you are saying but that seems crazy to me if you share the house.

[Lcb123]

You can’t be on the deeds but not the mortgage. I’d seriously be looking at getting married so you have some financial protection.

[2kids2catsnolife]

I'm really only asking as I think you should be double checking with land registry as it would be a very unusual situation.

[2kids2catsnolife]

Going down a Google rabbit hole and actually looks like HSBC are (or were) the only UK lender who have a legal charge to accommodate being on the deeds and not the mortgage, which is interesting. It was from some years back though.

[TaraRhu]

Are you under 40? If so maybe a lifetime isa?

[Whattodowithit88]

Thank you all for your concern. You can be on the deeds and not the mortgage. If the mortgage is very low compared to the value of the house. The house is worth around 400k and the mortgage is only around 100k so if he doesn’t pay it, it’s no risk to the bank as they can easily get their 100k. They would still be able to take the money even though I’m on the deed because the loan is against the house, he owns it too. If just I owned it then he wouldn’t be able to mortgage against the house, but he can on this instance as he owns the house too and is also on the deeds.

This is not our circumstance but think of it like this, a guy owns a house and has a mortgage on it, he meets the love of his life and puts her on the deeds. She doesn’t have to be on the mortgage to be on the deeds, anyone can own a house or be put on the deeds. There is a difference between lending criteria and home ownership.

[Rainbowqueeen]

I’d definitely top up your pension and maybe keep 5K in a high interest savings account as emergency money.

[VanCleefArpels]

Property (and taking in huge debt and other financial obligations) is madness

You can invest £20k in an ISA - get an IFA to advise on a medium risk portfolio that will get you a better return. In future tax years if you have money to spare you can top it up

Then take the remaining £5k and spend it on a fabulous holiday

[dontgobaconmyheart]

Just wanted to add that I am another with a property where I am not on the mortgage but very much am on the deeds (and yes I have the full paperwork for this, which was requested by the lender as part of the application and done in the presence of a solictor) and it is a 50/50 ownership split (with our respective deposits separately protected should we split) so whilst I don't think this is something that most lenders allow, there are some who have done so - ours is with a very well known bank. Interestingly we are looking to move so had an appointment with the bank recently to discuss options and were told that they no longer offer that option so if we remortgaged I'd be required to be on the mortgage as well regardless of whether I had a contributory income. Not a problem and doesn't really make a difference either way to me but just in case anyone is interested.

OP I would check whether you or your DP have any National insurance contribution gaps, pay those if so. Do a health check on your pensions.

Given that you pay towards the mortgage I would still look into the benefits of overpaying on the mortgage. Overpaying to reduce the term will mean you are mortgage free quicker and will pay significantly less for your home over time than you currently are and have a positive impact on your interest rate when LTV decreases. That isn't 'losing money', it's saving an awful lot of it over time and paying several years less interest for the same property and owning it in full ahead of time whilst spending less on a monthly basis which will enable you to save more. Frankly if I were now earning I would just add myself to the mortgage, which I imagine will reduce the interest you pay as well.

Make sure any Savings you don't need access to are in high yield savings accounts or ISAS.

I wouldn't want to be a landlord and don't think it's easy money, so unless you have prior expertise and a full understanding of costs (council tax on a second home, all responsibilities and maintenance costs etc) then I'd not do it to yourself.

[uncomfortablydumb53]

I don't know if you're thinking of getting married( which would be the easiest solution) if not legally ringfence your inheritance
In this situation you are more vulnerable than you realise

[EggInANest]

What is the benefit to the OP in getting married?

She has a job, she has her name in the deeds/ joint ownership of the house, and has £25k which is hers and hers alone. If they divorced (rather than split) she could have rights to his pension as part of the settlement, maybe?

[Soontobe60]

@Whattodowithit88

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.

You’re not completely correct. You have £275k equity in the house. If the house is owned as joint tenants, you each have £138K equity. By reducing the mortgage by £25k, you now have £300k equity. If you change the ownership to tenants in common, you can split it in different proportions. So you’d have £163K equity to his £138k. That’s 54% equity to you and 46% equity to him. Your TIC deed would specify this.

[Soontobe60]

To add to my last post, reducing the mortgage balance will have a significant impact on obtaining another mortgage should you wish to move as it would mean that youd have a smaller LTV, therefore might get a better interest rate.

[Usernamenotavailab]

@EggInANest

What is the benefit to the OP in getting married?

She has a job, she has her name in the deeds/ joint ownership of the house, and has £25k which is hers and hers alone. If they divorced (rather than split) she could have rights to his pension as part of the settlement, maybe?

Many people seem to think marriage “protects” a woman financially.

it’s what a was told. Older family members were very sure that I needed marriage if I had children.

it doesn’t. It protects the financially weaker party. If one is the higher earner, owns the house, has a significant inheritance etc, and the other doesn’t, marriage will share that persons wealth with the other party. Sex is irrelevant.

o/p has already said she wants to keep her inheritance separate from the family pot. So I have no idea why posters are suggesting marriage as the best option, as it will put that inheritance straight into the family pot. They aren’t grasping either that she and her partner seem on relatively equal footings financially, so marriage will make him better off and her worse off.

it’s an old fashioned assumption based on women being lesser financially, giving up work to look after the kids etc. relationships don’t alway work like that these days, women can earn their own money and buy their own things.

[Usernamenotavailab]

@Soontobe60

To add to my last post, reducing the mortgage balance will have a significant impact on obtaining another mortgage should you wish to move as it would mean that youd have a smaller LTV, therefore might get a better interest rate.

o/p could still protect her money by investing it in an isa or similar until the decision to move house is made, then weigh up the benefits of using that money to reduce the Ltv.

doing it now she’s effectively losing that money to the family pot, when it’s her money she’s made clear she wants to ring fence.