Buying a house with DP - tenant agreement

[sunnyday150]

Me and DP are looking to buy a house this year - DP will have around 70k deposit which was gifted by family.

My deposit is around 10k - which is saved last year after university. He has mentioned signing an agreement before we live together to essentially ring fence his deposit which is think is sensible, either joint tenants or tenants in common.

Does this agreement still stand once married? Also I'm struggling as how to work out finances, before the agreement was mentioned we discussed all of our finances being joint, including bills, savings built and our spends.

However I will be contributing a larger portion towards this, I can afford to save around 1k a month whereas DP maybe 200 after bills and expenses, however recently he said he's not been saving anything due to a few unexpected costs in the house.

Is this a good idea? Or should I be considering having a separate savings account?

keep your savings separate

Always keep money seperate. If things go wrong you will have a back up plan

Separate savings.

He wants to ring fence his larger contribution which seems fair enough.

Why wouldn't you do the same?

Yes I think it's sensible to do that and I'd do the same in his position.

As I'm not long graduated I've only recently started managing to save. But my earnings are higher than DPs and it was assumed all of our income would be pooled and new savings would be joint. However I'm wondering if this is sensible or not.

Ring fence £60k of his deposit. Though he might want to keep some money if he can't afford bills.
Pay equally for household bills.
Buy as tenants in common - you can then leave your half to whoever you want in your will if the relationship goes wrong.

Who assumed that all new savings would be joint?

Whilst preexisting savings would be separate?

I'd argue that either is fine. But he can't have it both ways!

'It' was assumed? Come on OP. Who assumed this?

He wants to ring fence his deposit but have a share in your savings? That doesn’t seem fair. If he ringfences his deposit, then I think you should keep your own savings and share household expenses equally, until/ unless you have dc, in which case you’ll need to revisit the arrangement so that the person looking after the baby isn’t directly or indirectly penalised. And that’s a discussion you should have now.

A few weeks ago we spent an afternoon working out our budget using an online calculator after we got our mortgage in principle. We just put our salaries plus outgoings and worked it out what would be left over every month.

DP said oh that's not too bad then we have a lot left over. But now I'm reflecting on it obviously this mainly will be from me!

'What's yours is mine and what's mine is my own' springs to mind...

No, no, no. He doesn't get to ring fence his money and then have full access to yours. At the very least keep your savings separate. Potentially you could keep separate current accounts and have a third one that's joint for outgoings. Then pay into it proportionately depending on earnings.

You need to go back and have another conversation about finances. If you are not married buying tenants in common is sensible. If he wants to ring fence his £70k you ringfenc your £10k. Pay equals shares for food and all bills and maintenance on the house. If you have some left over save it in your own personal account. Over time maybe you can save an equal amount to his own ringfenced deposit. If he can't pay half then he needs to pay less deposit and use some of his savings to pay his way.

When me and DH bought we weren't married. Was going to do declaration of trust but his parents gifted him the difference. Everything equal split.

Then we got married and had a baby and moved to a proportional contribution model. Say we were both on £2K a month. Normal months would be 50/50 split. If I was on maternity leave (say £500), then I would pay 20% and him 80%. If I wasn't earning at all then he would be paying 100%. This is up until it took his entire wage, at which point would come out of savings 50/50.

My understanding is the declaration/deed ring fencing deposit usually gets set aside upon marriage unless it's written in it you're planning marriage and want it to stand even after marriage. Are you planning kids? You are writing the document with the lawyer so theoretically you could put what you want in it. For example if you're paying £500 a month more, than him then could you write in that after each year the ring fenced amount reduces by £6K? Or that after X number of years it is set aside? Or that it's nullified upon marriage or birth of a child?

You can also look at that contribution model. So if you both put 75% of your salary into the joint pot, and keep your own 25%, you'll each have 25% but yours will be more because you earn more.

I'm wondering a few things.

What are his expenses are that mean he can't save anymore? (But you can, and cover him!)

Can he really afford the 70k deposit he's proposing? Sounds like he needs to use some for his expenses. Instead of using you for his expenses.

Unless you are married, I would keep finances separate.

Once married, still ring fence your house deposits and each have a fair savings amount each month into a personal account.

Yes I'm hoping to eventually save similar. But realistically I think DP needs to put less of a deposit down. As any work that needs doing in the house is likely to come out of my savings or what I saved in the future if he doesn't hold some back.

I think as well I'm concerned that I've read these agreements can cover a percentage of the house, which would go up as the home improved or with time. If we end up with a home needing new kitchen/bathroom and I pay for it then it does seem unfair.

We do want children and to get married in the next couple of years.

it does seem unfair.

It is unfair!

In the current arrangement his money is ringfenced and will probably be an investment.

Your money is used for a new bathroom or even paying the bills. Because he's locked his 70k away in the house!

Be vary careful op. As much as you get on now, things can take a turn and you just never know (I speak from experience). By all means ringfence his £60k (or whatever it is that he is able to provide above your contribution) but do it properly, and with a solicitor.

Also consider how your contributions to renovations will be accounted for if he’s unable to contribute the same. This needs to also be recorded, in my opinion.

If and when you get married, draw up a pre-nup. I cannot stress the importance of this enough.

With your day-to-day expenses, you should each have a joint account and contribute equally. Use that for any shared expenses such as bills. Keep each of your own money separate in your own accounts.

The ‘I’ll ringfence my £60k but your savings are shared’ is a big red flag. It doesn’t matter how innocently this was said.