Am I about to make a huge financial mistake?

[MaryMaryVeryContrary]

DP and I have 2 children. Unmarried - he proposed but kids came along and can got kicked down the road. Didn’t see the urgency - I have my own career and money, but we keep meaning to as administratively it would tie up a few loose ends.

We have been together 8 years and after 1 year I rented out my flat and moved into his house. Tried to sell my flat during covid but no interest whatsoever so rented it out again. Now it is sold and the time has come to pool our cash and buy the family home we really want.

We found a property, got an offer on his house and all seemed to be going well. 1 week before exchange we discovered our plan - for me to contribute half the funds, and for him to take out a mortgage for the other half - isn’t viable as the bank won’t lend a mortgage to a person where another person jointly owns the property. Either we go on the mortgage together or nothing.

The issue is I have (paid off, from 2014) CCJ from an unpaid parking fine; and (believing I was sensible) have never had a credit card, so my credit rating is being refused for a mortgage.

I’ve been advised to give my (huge as an inheritance - 150k) deposit to DP, he then buys the house as a sole owner and I get a deed of trust to ‘protect my share’.

I feel everyone is trying to rush me into this and while I have an appointment with a solicitor next week, I would be really grateful for any input from others on what they would do. My gut tells me this isn’t a good idea.

I am wondering who is "everyone", what are their motivations? Your partner would like the money obviously, the estate agent would like to sell the house to get paid, same with anyone else organising finance. As a solicitor the deed sounds complicated- what does it say and how exactly does it protect you? Don't be told it's complicated, someone should be able to explain it simply to you. If the mortgage company aren't happy to lend to you I doubt they will agree to the Deed going on the title? Can you get another lender? It doesn't really add up for me and you should get independent legal advice even if you go ahead, which I don't think you should until you are happy. What is the rush? Property transactions sometimes take a long time for a reason, it is absolutely a process during which you should stop, think and decide. With £150k equity I don't see what the bank's issue should be unless the house is very expensive - have you seen correspondence from the bank confirming the position? Hope the CCJ isn't being used to shame you into agreeing to this.

@MaryMaryVeryContrary Just one thing OP... keep in mind that sinking a whopping £150k into a house means a loss of financial opportunity. That £150k could be worth double in 10-15 years by placing the money in a low cost index fund.

A big fat no. I can't say no more strongly. Really really no.

OP, get yourself an appointment with a really good lawyer, it needs to be on your own, they are advising you only. They don’t offer ‘a bunch of options’, it will be advice specific to you. I was where you are and made the wrong decision. Get this right. Lawyers exist for a reason, don’t base it on a bunch of comments online.

Please read all my posts

The other thing which I didn’t mention yesterday but I think is worth considering is if you did spilt up and you are primary carer of DD, you won't have grounds to remain in the property. All your trust deed will do is put a restriction on the title and ensure any sale proceeds are distributed in accordance with the trust deed, it won’t allow you to force a sale so won’t help you if the worst happens and you’re out on your ear. There’s nothing to force your OH to sell, what if he never decides to sell and you’re waiting years and years with him sat on your £150k??

Better to be on the title, have an automatic right to occupy and that way you could remain in the property with your DD if you fell out and potentially exclude him on the basis that you’re the main carer (if you are).

Now I know all this sounds academic and worst case scenario - but with divorce rates as high as they are it’s worth considering the worst case.

Sorry not sure where I got DD from - your two children anyway.

I think you have to apply to the court who issued it to have it taken off. As it was so long ago I think you can find out which court from your credit file or ask Experian for the details.

Write to the company and ask that they remove it.

Well it depends on the nature of the gift as capital gains tax may become applicable. There is no tax on cash gifts as long as you live more than 7 years after giving it. It you die then it forms parts of your estate for inheritance tax purposes (being married before giving it will solve that issue)

Only if you die within 7 years of giving it

And it is added to you estate so if the full wastage value is below the threshold for inheritance tax (which it sounds like the op probably is) then none will be payable anyway

Pretty sure that you don't provided that the giver lives for 7 years after the gift is made.

You don’t - £3k is the limit that is exempt should you die within 7 years.

I don't understand the advice you have been given. When DP and I bought a house together, I put down a significant deposit from the sale of my flat and we have a joint mortgage for the remaining balance. Our % share in the property reflects what we put in.

As PP, you need to speak to another mortgage advisor.

It does sound like a good opportunity to sort out a lot of things if you don't have them in place now. Have you written wills? What are the arrangements for the children should you both die together eg in a car accident? Have you nominated each other to receives some of the pension once one of you dies? Are there power of attorney forms in place for when/ if they are needed? What money do you consider joint and what do you consider your own? What would be the implications of marriage on these things - eg, I think you need to be married to get some of the state pension once your spouse dies. Doing this is about a lot of things, and can be quite emotional, but basically you are both getting your affairs in order in the best way for you all. When DP and I bought our house together I had a deposit and he didn't, so we arranged it so I owned more of the house than he did, then a few years later he gave me some money and we changed the ownership of the house to 50/50. To do this we had to be tenants in common rather than joint tenants but we simply left each other our shares in the house in our wills. It sounds complicated but it isn't really. The question is, how do you put the best arrangements in place to ensure a secure future for everyone taking into account what might happen in future? Bear in mind marriage automatically invalidates previous wills. We lived together 25 years and then married on retirement because for us it was much better to do that financially. Marriage is an emotional commitment but it has huge financial and practical implications. In this situation, it's important to know what they are for you. I don't know anything about CCJs personally but the CAB website says judgements are removed from the Register after 6 years even if it hasn't been paid, and that should make it easier to get credit.

You appear to have your head screwed on and have spoke. To you dh and out a stop in the house for the time being.

Speak to the broker or even get a new one. I had a fair credit rating and was still able to get a mortgage. Ok it was on a slightly higher interest rate for a while, but that won't last forever.

It's 50/50 or not at all.

You leave him a life interest.

There are lots of threads on here and on MSE where the surviving spouse/partner remarries and disinherits the children from the first marriage/relationship.

Yes, that's what I said. You can specify in your will that gifts are free of inheritance tax. The estate pays.

Hold off on buying a house together and get your credit rating established. Get some credit cards and pay them off in full each month. Never register the house in someone else’s name.

Hi op,

no if you are not married and you haven’t seen a mortgage bricked to protect your assets…I wouldn’t get into this.

I also would rethink buying something that need a mortgage with someone that is so unclear and messy. What happen if he « forgets » to pay?

Of course it's not a good idea.

You've been together 8 years. You have two children.

And at no point in your lives have you taken vows to make that major commitment.

And now you're worried about your financial commitment.

Neither of you have ever loved the other enough. Neither of you has ever been proud enough to parade the other around as the person who makes your life worthwhile.

I'd call it quits. Or agree to stay together until the children are 18.

But you two need a financial agreement right now, to protect both your assets.

Because you two are not a couple. You're two intelligent clear minded people. But you're not a couple. So just look at your life and work out how to make it work.

Don't buy this house without further financial and legal advice.
(I say that hoping you are not in my chain, a week before exchange!)

Why can't his name be on the mortgage but you are both listed as joint owners of the house? The mortgage is separate from the house

DO NOT DO IT