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.

No you aren’t. I am the same as you. Everything gets thrown in the pot whenever it comes from

My view is that either you are a team or you are not and combining family finances is one big part of that. Many relationships fail because of financial stress but also attitudes to money even if it is plentiful. It is so important that both parties in a relationship have the same and equal attitudes to money with no imbalance of power.

I get that people feel they need to protect themselves thought and honestly whilst prenuptial agreements are not necessarily binding in all cases they do carry a lot of weight these days so definitely worth looking into one if you are bring substantially different assets into the marriage. If the OP were to get married this is the sort of thing that they could discuss ahead of time so they feel comfortable about the ownership of what was brought in to the marriage

I know that might have been already suggested, but what if you get married but have a prenuptial agreement that in the even of a divorce you will receive your original investment and the rest of the equity will be split evenly?

Are you sure a lender would be happy with this set up? They don’t generally like giftors to live at or have any interest in the property (which you would with a trust deed).

HSBC do allow another party to be named on the title but not party to the mortgage where there is good loan to value.

There is no reason you shouldn’t get a mortgage with that. Something is off here. You need to be checking your dp’s intentions.

We are like this with our finances but big difference is we are married. OP doesn’t have the same security as she is not married.

Also OP - people get mortgages with far worse credit than you.

Some less than ideal brokers encourage people to take the path of least resistance so they can collect their commission, rather than the path that has the most satisfactory outcome. I have been the solicitor giving independent legal advice to the occupier (which is what you’d be) on many occasions I’m informed a SAHM they absolutely can be party to the mortgage and on the title because them not earning isn’t relevant to the overall application. Brokers either don’t take the time to properly advise or are quite junior and don’t realise.

Wouldn't he have to pay tax on a gift that big? You can only give 3k a year tax free.

OP please go see a different broker on your own. I suggest you only put up deposit that is equal to that of your partner, even if you get married first.

That’s only for Inheritance Tax and it would be tax for your estate to pay on your death (if applicable which is unlikely).

He himself would not have any tax to pay on a gift of any size ever.

I don’t know why people think the £3k gift tax exemption applies to anything except inheritance - I know of a man that was gifted £1milion and he never had to pay a penny of tax on it.

You need to speak to a good mortgage advisor who knows what they are doing!
Search IMS Thame, they are owned by women and have helped me out of a tricky situation.

That's because his estate paid the inheritance tax . . .

I believe the retention period for a CCJ on your credit file, paid or not, is six years from filing. Why is it effecting your application now? It should even be on the radar.

I don't believe this is true. I just can't, someone is having you on. You need a mortgage in principle to be putting in offers and to be considers! DO NOT hand over £150k!!!

The mortgage broker is offering advice to your dp’s interest, not yours. It is quite astonishing that you are being rushed into something like this. Ditch the broker and I think you need to ask your dp some serious questions about why he thinks this is in any way fair on you.

Buy any property together as tenants in common instead of as joint owners & leave your share directly to your kids in your will. Your partner should do the same and this way you've protected your kids against disinheritance if you remarry.

In the meantime, put £50k of the money into premium bonds in each of your kids names & £50k in your name. Wait until you see a solicitor for proper legal advice as the broker isn't on your side here.

He’s insisting he informed the broker of our position so I offered to phone them myself to complain. Now he’s squirming.

Your last post to hold off until you improve your credit score is the right decision.

However, I would play it cool at the moment and pretend to go ahead. Use that as a cover and please call the broker to find out what the true position is first. If your partner was lying to you, that is a huge red flag that he values money above your wellbeing. In other words, he is prepared to steal from you.

That would affect my view of this relationship going forward.

Forewarned is forearmed.

He isn’t lying, I checked my credit score myself and saw the email from the broker!

But I appreciate the heads up, because I also wondered (not because he’s given me reason to but just because I try to be v cautious in light of my family history)

What happens if I fall under a bus (or he does) and the other spouse only is tenant in common?

You need to stall the process, get the ccj removed and start again. A 6 year old can should not be there

My husband is a mortgage adviser and I’ve just mentioned this to him, how long ago was the CCJ OP?

Edit- apologies just saw 2014, you need to look into that OP. After 6 years it should not appear.

If one of you dies whilst tenants in common then the half of the house which belongs to the one who dies goes to your children. So really it wouldn't have any effect on the surviving one until the child/children becomes 18 and only then if they want to sell the house to get their share. Or at least that is how my DP and I have it set up.

The only problem we have now is that when we bought our house we only had DS1 and since then we have had another child so either we need to get DS2 added on to DS1 as our beneficiaries or one of us changes their beneficiary from DS1 to DS2 so I don't know if this is something you would need to bear in mind.

You don’t have to pay tax on gifts

Absolutely. It just shouldn't be recorded any more either in your credit report or the register. In fact its a clear data breach. Please contact the credit reference agencies and get it removed as soon as possible.

Pretty sure you do.