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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

renting, buying and student finance - help needed

20 replies

wicketkeeper · 29/10/2011 13:43

My son and his girlfriend have been living together and renting for over a year. She is a student, he works full time. They paid equal shares of the rent etc. He was recently left some money which means he can afford the downpayment on a house. But they are now worried if she is also on the mortgage/deeds (which they would like to do) it will affect her student loan entitlements. I've suggested that, although I would normally say they should both be on, it might actually be better if the house is in his name and she pays 'rent' to him.

Does anyone have any suggestions/ideas? Are we right to be worried that she would lose her benefits if she 'owned' a house (even though it would be my son's money that actually paid the deposit).

Sorry to post in AIBU - feel free to tell me where to go...

OP posts:

Lucyinthepie · 29/10/2011 13:46

She could get advice on benefits from CAB.
I'd be more bothered about the idea of them having joint ownership of a house that your son is going to pay more into than she is. What happens if they split up? Why do you think they should both be on the mortgage?

worraliberty · 29/10/2011 13:46

To be honest, with something this important I would seek proper legal advice.

A mortgage is normally the biggest debt of our lives and I really wouldn't enter into one on the advice/opinion of random internet posters.

No matter how well meaning they are.

HitTheRoadJack · 29/10/2011 13:51

I doubt she'd be approved for a mortgage being a student...and as they're not married there's no legal reason for her to be on the deeds.

If she does pay him rent, and they break up, she is entitled to small claims him and claim back all of the rent-likewise if she "financially contributes" to the house (decorating/building etc).

Would seek legal advice and make sure your son is protected. If they split and it's "his house" he may have to 50/50 it.

Lucyinthepie · 29/10/2011 13:53

Surely it's not right that she could claim back her rent just because they split up?

I think you should speak to CAB op, or maybe your son should anyway as he's the one who's going to be buying.

HitTheRoadJack · 29/10/2011 13:56

Yes my best friend just bought a house with(out) his gf. He was advised as it is solely in his name, any monies paid to him can be clawed back through a small claims, so if he wanted his girlfriend to live there to ensure she contributed financially elsewhere-like cover the gas/electric (whatever amounted to a similar amount).

Lucyinthepie · 29/10/2011 14:15

Legal advice is definitely essential then!

duvetdayplease · 29/10/2011 14:41

I would be really, really cautious about putting her on the mortgage unless you actually consider it to be as much her house as his. If/when they break up, it is way way harder to split a house than you might think. If prices have dropped then they both owe money etc. It could be a total nightmare.

I speak from bitter experience, is easier to get divorced (pre-kids) than sort out a house.

If they are buying a house together genuinely as part of a married or cohabiting as though married couple then fair enough but if they are not 100% committed yet save it for a bit.

soundofherwings · 29/10/2011 14:52

Owning a house makes absolutely no difference to student loans- I don't think they even ask about it on the forms. We're in the same situation, I'm a student and my partner works. We bought our house 2 years ago, but we were told that the fact that I'm a student made no difference to getting a mortgage, it was only our income that mattered. Student grants etc are counted as income for the mortgage application too.

The only issue I could think of would be with housing benefit- students can sometimes be entitled to it but you only get it if renting.

idrilis · 29/10/2011 14:55

This reply has been deleted

Message withdrawn at poster's request.

Original poster

wicketkeeper · 29/10/2011 17:25

Many thanks for all your advice. They're definitely looking to the long term, but still worth thinking about making sure all's fair if they do split up.

Lots for them to think about and I think a visit to a solicitor wouldn't be a bad idea. I don't remember life being this complicated when I was at this stage!!

OP posts:

EllaDee · 29/10/2011 17:45

sound - not always, they're not. I have no idea why, but I'm a student and my grant is, apparently not considered as income when I looked into it. I was pissed off but they were firm about it.

It is worth her checking that with whoever they're trying to get a mortgage from first, just in case it solves the problem (as it did in my case).

I think it makes a difference how old you are as a student, btw - students who're not counted as mature are usually assessed on the basis of parental income, and the income/assets of a partner would not be relevant, nor would any debts the student chose to take on be considered.

MrsOzz · 29/10/2011 19:05

Yep owning a house makes no difference to student loans.

My (now) DH bought a house when I was still studying, I paid half the mortgage to him from the start. I still do. After Uni we changed the deeds of the house so now I own half. I'm still not on the mortgage tho! I got a good deal ;-)

What I am trying to say is your sons girlfriend could contribute to his mortgage and living costs now, and then be added to the mortgage/deeds of house when she has a stable job. I can't see how anyone could find that unreasonable.

The deeds of the house do not need to be split 50/50. For example if your son is putting a substantial amount down on the house, he could 'own' a bigger share for the time being. If things go well they could become equals again on their next purchase, it will just give him some security for the time being.

Tread carefully though, you don't want to make them feel their relationship won't last or that she is untrustworthy!

Original poster

wicketkeeper · 29/10/2011 21:29

Thanks Mrs Ozz - that's exactly my feeling. It would make sense that if they split up he should get 'his' stake plus 50% of what's left, and she should just get the 50%. But I absolutely don't want to put forward the idea that they need to plan for splitting up. They're only 20, but have been together 4 years and are very much an item - I certainly don't want to sow the seeds of doubt. I think I'll just suggest that they take advice and maybe give them some questions they need to think about.

OP posts:

EllaDee · 29/10/2011 21:34

wicket - please do tell them they need to plan for splitting up!

If they have a strong relationship, this will not spoil it. In fact you could tell them you know their relationship is strong enough that planning in case they split up will not threaten it.

But at 20, they will not know how tough it might be financially to sort things out. If you don't tell them, they may only find out the hard way.

MrsB24 · 29/10/2011 21:43

This reply has been deleted

Message withdrawn at poster's request.

EllaDee · 29/10/2011 21:47

MrsB - is it not parental household income at age 20, though?

I could be wrong ... but it's obviously worth checking.

vj32 · 29/10/2011 22:59

Parental income is assessed for student loans, regardless of who you live with, unless you are 25 or over, or married. Or if you can prove you are estranged from both parents or they are both dead or you can prove that you are supported yourself financially for (I think) 3 years. If your parents are split it is the household income of the parent who you have most contact with. (Been back to uni my self recently and have helped my sister do hers for the last 3 yrs)

Agree owning a house makes no difference to student loans or bursary. She won't be receiving any other benefits if she is a full time student without any dependents etc. (Unless maybe an NHS course as those are financed differently)

If they do go and buy a house the solicitor should get them to buy it as tenants in common if they buy it jointly, then write a deed of trust to say who owns what share. However they really need to have decided before hand how much money each partner is going to give - we were a bit confused by this as we hadn't thought about dividing the mortgage as well as the deposit. If she has no deposit and no income, I don't see it being a 'joint' purchase - surely it is his house and she will pay rent. I agree he can always add his gf later.

Original poster

wicketkeeper · 30/10/2011 00:17

vj - that was my suggestion - it's his deposit, and as the only wage earner the mortgage will be assessed on his income. But I know that currently they pay equal shares of the rent and she fully intends to continue to pay equal shares of the mortgage. She's currently assessed on the basis of her parents' income - but was concerned that if she is a house owner (ie is on the deeds) then parental income wouldn't come in to it and she would lose benefits. It makes me so cross that they are trying to make the right decision and be fair with each other and it gets so complicated.

OP posts:

MrsB24 · 30/10/2011 10:30

This reply has been deleted

Message withdrawn at poster's request.

Original poster

wicketkeeper · 31/10/2011 08:31

Thanks all - they've gone back home with lots of questions to ask, so hopefully they'll have things sorted by the time it comes to making the big decisions.

OP posts:

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