AIBU to be unsure about this? (First time buyer problems!)

[DilapidatedGlamourpuss]

My DP and I have been together for 6 years, and have been talking about buying a property for the last couple of years. We are in our mid-twenties and both work in London, so this is where we would be looking to buy.

DP earns £30k a year. His job involves a lot of travel; he has been in the UK for about 3 weeks out of the last 5 months. Once he gets back from his current trip, he will be around quite a bit more, but will still travel often. I have just been offered a 12 month contract at £22k. I know that getting a joint mortgage will probably be difficult, as I don't have a permanent job yet.

He is saying that he will try and get a mortgage on his earnings, but I don't know if that will be possible. If we buy a flat it will probably be fine, but we were hoping to buy a house, make improvements while we are living there and move on in 5 years or so when we will probably be getting married and starting a family. In London, we are unlikely to get a mortgage for a house on £30k!

Also, it means I will be in effect just paying him rent and wont have any stake in the property. He doesn't seem to understand why I might be bothered about this, he says if we split we would split the proceeds 50/50. I want more assurance than this, I think we should do it properly.

He has saved about £15k. My parents have offered us £20k as a deposit, to be repaid to them on the sale of the property (plus a percentage of any extra profit). They are hoping to raise a bit more money for their retirement. I haven't managed to save anything- I am still paying back my MA and have struggled to find long-term work after uni.

I have said to DP that my parents wont give the 20% if my name isn't on the mortgage. AIBU? I think it would be better to rent for a while longer, until we can get a mortgage on equal terms. He doesn't see it like this- he seems to think as soon as he gets back from his work trip we will find a house to buy and move in . He does have the tendency to bury his head in the sand a bit.

I need to move out of my parents' house by mid-April. My sister will be home from travelling and there is not enough room here! I want the independence of living with DP again, and to cut down the commute.

Hope you can help me sort my thoughts out a bit- I can't discuss this properly with DP until he gets back next weekend. He is in India and the electricity keeps cutting out so Skype is challenging to say the least

[Fannydabbydozey]

Dilapidated the trains are expensive but from what I gather all damn train fares are expensive. We're first capital connect - they're not too bad for reliability etc and we still get a seat! I think the key is to have a commute that doesn't include the tube. That means it's cheaper. My dh's unfortunately does include the tube but he has a season ticket loan so doesn't notice it as much. I don't work during rush hour so that makes a massive difference and I have a network railcard to get money off each fare.

Where are you both working? I work on the south bank and most of my friends live west as they can get trains direct from Waterloo. I keep telling my husband to get a job nearer kings cross as we'd be quids in.

[pinkdelight]

Sorry for any repetition - had left this window open and missed some of the later replies!

[pinkdelight]

You need to go and see a mortgage broker. Sounds like you're guessing a lot and making duff assumptions. It's perfectly possibly to have your name on a mortgage even if you don't have a permanent job. There's all kinds of different set-ups you can get that don't mean it's just his name and you're effectively a renter. And you must get your name included - don't rely on his good nature because if things went wrong, it's guaranteed he wouldn't feel so good natured.

I seriously doubt you'll get a house in London though for that money, unless you mean at the very edges in Essex/Croydon/Kent. Even then, you'd more likely get a flat. But that's fine for a FTB and you'll most likely make money on it if you invest wisely.

But first things first, no more guessing and go and get the facts.

[ohnothewoodchip]

And that was in December, not before all went tits up. Short term contract or not, you should be fine

[MostWicked]

I think there is a massive issue with your parents' investment that needs a legal agreement to cover everyone involved.
You cannot have an informal agreement for something like this.
What happens if the property drops in value?
What happens if you split before any profit is made?
What happens if they need access to their money?
Lots of what ifs that need covering.

[ohnothewoodchip]

Definitely make sure your name and the percentage that's yours is on deeds. If he won't go for that then don't consider going ahead. If the worst should happen, breakups don't bring out the best in people.

That aside, I'm a contractor and on anseries of 3 month contracts. Had no problem getting the mortgage in my name only.

[sparechange]

OP,
Firstly, you cannot be on the deeds but not on the mortgage. The mortgage company will not allow it. You can get a declaration of trust drawn up, which is for legal purposes, the same thing if you were to split.
You can jointly apply for a mortgage with your income down as nil (couples where one is a SAHP do this)
The mortgage company will work it out using the same criteria - ie 3.5x joint income, and the mortgage will be in both your names, so will the house.
Obviously, when you come to remortgaging, if you are in a permanent job you can just remortgage with your new income.

Can you afford to buy somewhere in London? It depends what you want. You can obviously buy something, but for your budget, it would probably be ex-LA and one, possibly 2 beds. If this isn't a problem for you, then you have some options.

[daphnehoneybutt]

If your parents provide the money they will need to sign a legal document saying it is a gift and they have no claim over the property.

My friend's mum gave him most of his deposit, he is paying it back to her each month but in the eyes of the law, it is a "gift" and she has no claim on her money if it goes tits up.

As NoArmani says you will find a lot of your deposit money goes on surveys, solicitors, fees and stamp duty. We have ended up spending approx £4k on all that- it needs to be factored in. I can imagine in London you could easily multiply that amount...

When we applied for mortgage they wanted evidence we had the stamp duty money as well....

Plus moving costs, and if you are buying a wreck - the opportunities to get fked over are basically endless you need to minimise all chances of this happening.

[NoArmaniNoPunani]

I don't think you're being very realistic if you think you'll be able to buy a house in London on your salaries. Even on a mortgage calculator (which as a pp said, often wildly overestimate what you can borrow) the max you could both borrow is 220k.

Is the £35k all to be deposit or do you need some of it for stamp duty/fees etc.

[Bearbehind]

It's not worth arguing over anywhere but you are mentioned on your mortgage application, even if it is only as a dependent, and you make no financial contribution, yet you advise the OP to not be mentioned on the application, despite her parents contributing £20k deposit which you advise you tell the mortgage company is a gift, whilst having a secret loan agreement in the background

[AnywhereOverTheRainbow]

bearbehind

I am not on the mortgage application as a joint one, where did you read that? Yes maybe you mistook me with someone else.

As a wife-dependant I am, of course, indicated on the mortgage application because I would live in the same house as my husband. Yet I am not responsible of any payments, nor I am entitled to anything concerning the house, which is fair given that I don't pay a penny.
The OP is not even married, that is also different, therefore my advice would be NOT to be in the application or involved with the house anyway.

[CinnabarRed]

I don't mean to rain on your parade, but there's no way you can afford to buy in Z2-4 with your combined deposit and earnings.

If I were you I would:

1. Start looking for a mortgage provider so you can find out exactly how much you (as a couple) can borrow with a £35k deposit and your current salaries - the mortgage provider will tell you whether your 12m contract can be included in your borrowing limit or not, and will also be able to confirm such matters as the terms on which they are willing to allow you to go onto the deeds (if not yourself a borrower).

1. Then start researching properties within your price bracket in areas you can realistically commute from.

1. Speak to a solicitor about how to protect your interests, your DP's interests and your parent's interests when the property comes to be sold (hopefully because you're buying a new, bigger property together, but just in case.....). The advice they give will depend, I suspect, on the information you get from the mortgage provider.

[DilapidatedGlamourpuss]

FannyDabbyDozey what are the train fares like from your area? I'm happy to consider outer London (we are looking at zone 2-4 at the moment) or Kent/Essex. My parents live in Kent at the moment so that's where I currently commute from.

Thanks everyone for your points- more thought definitely needs to go into this on all sides. I love my DP but I am realistic and don't want to be in a situation where if the worst happened I lost everything. I also don't want to risk my parents' money if it isn't all 100% kosher. I just hope when he comes home he will understand my POV

[Fannydabbydozey]

Also, when we went through a broker they did our mortgage on affordability rather than multiples of our earnings - and I was on renewable contracts at the time. I appreciate that this was when lenders weren't so paranoid and strict, but maybe some lenders still operate on that principle. If we'd gone on multiples we'd have got a 60 grand less than we did.

[HauntedNoddyCar]

*sorry adding DH to mortgage and registered in joint names therefore so we both had rights.

Even if you had a legal right to recoup your investment but weren't on the deeds or mortgage then I presume he could kick you out and you'd only get your money if it were sold.

[Fannydabbydozey]

You don't have to live in London to work in London. Both me and DH commute: him everyday, me whenever I work in London which equates to 2/3 days a week. We live in a small town with a fast train into London. Takes 30 minutes. We never could have afforded a house and garden in an area I liked in London - we had two kids and wanted safe/good schools/minimal urban angst. So we widened the search. It worked for us. Lat train is at 0130 so I even get to go out partying (even though I can't remember when that last happened)

Mortgage providers are used to unusual financial set ups these days - so many people are contracted or are freelance. My friend just got a mortgage sorted and never thought it would work out as he hasn't been freelance for long enough. Don't lose heart and don't think that you can't be part of the buying power.

And like everyne else's says, your name needs to be on the deeds if you are coughing up the majority of the deposit. And paying half the mortgage.

[HauntedNoddyCar]

It could br straight forward. When we bought our last house the bank used my earnings alone to calculate what they'd lend then added DH onto it with no impact. I earned a lot more then. So whilst you might not add to the sum you might not reduce it either.

But as pp said even with a joint mortgage I wonder what you'd be able to afford. He might be in for several shocks

[Spickle]

A legal agreement, such as a Declaration of Trust, can be drawn up by a solicitor (you could ask the same solicitor who acts for your purchase) so that when you sell, each of you get whatever percentage of ownership you decided at purchase. You can own a property as Joint Tenants (you get 50% each) or Tenants in Common (whatever percentage you decide).

However, I also would query what you can afford in London. Once you have an idea how much a mortgage company would be prepared to lend, take a look at Rightmove/Zoopla to see what you can realistically afford.

[whois]

If you're putting in a deposit then you bloody well need to have your name on the deeds!

And a legal agreement drawn up saying who gets what on sale of property.

Mortgage is a separate thing and you'd be better off both going to see a mortgage advisor together to discuss options.

What kind of a property he thinks he can buy with £15k and a £30k salary in london is a mystery. Doubt he would even be able to afford a shit hole doer upper studio in a shit area.

[Spickle]

My name is on the mortgage of the house I bought last year with my DP. I wasn't working but had a large deposit so wanted to be named on the deeds. I am pretty sure the mortgage company, who will have a charge over the property you buy, will insist both owners are named on the mortgage.

[Bearbehind]

anywhere, unless I'm going mad (entirely possible) your situation is massively different to what you advised the OP as you suggested she didn't go on the mortgage but you are on your application.

That's a huge difference and changes everything.

[Joysmum]

You need to get yourselves off to a solicitor to draw up legal docs saying that when the property is sold you get x % and he gets x percent rather than just getting your name on the deeds or a joint mortgage.

[AnywhereOverTheRainbow]

Bearbehind

Yes it is at a final stage.
What you say depends on the amount borrowed and how many transfers were made. If you get around the legal bundle of laws concerning the money laundering issue there won't be any problems. They can't discuss all transfers.
Need to add, it also depends on who is the mortgage lender (that could be another thread, a nightmare dealing with banks....) and that the agreement between you and who gave you the deposit is kept 'private' ;)

On another topic, the mortgage calculators online are quite useless. My husband had a maximum amount to borrow of 144k online and he struggled to get 70k, which is not even half of it. Plus the bank advisors calculate a standard monthly expense even though you have receipts of food shopping, bills, whatever.

They don't care if you eat water and bread everyday, they make their own calculations.

[Bearbehind]

darlinggrace, I'm happy to be proved wrong but I'm sure you can't be on the deeds and not be mentioned on the mortgage, even it is to state you have no interest in the property.

anywhere has your mortgage completed? I took advice on a similar situation and was told the lenders investigate the source of deposits and if there were conditions attached, it affects the application. I was advised they require evidence that if it is a gift, the person gifting, confirms that.

[Longtalljosie]

Right - well he may be nice in many ways but whether he realises it or not, he's trying to pull a fast one here. You're both going to put the deposit, cash and emotional energy into buying a house but legally it will only be his?

Fuck. That.

You're providing more of a deposit than him and your income isn't that much less than his - and that may change anyway. If you're thinking of having children with him you may earn less for a while. Do not get embroiled in a mortgage with him unless you are clear what you want out of the relationship. Are you both planning to stay together? If you're not in that place yet, are you clear what you want to do with the house if you split up? This is a big deal. Don't let him convince you it isn't.