Boring mortgage question - what is fair?

[Wolfgirrl]

Hi lovely MNers

My fiance and I have a 1 year old, we currently live in his house, and I rent out my flat that I lived in before moving in with him.

We are looking to move & buy a proper family home (current house has no garden, too small etc).

My deposit is much larger than his, 5 times the amount. However he has a much better paying job than I do (earns more than double).

Our options are to sell both properties and buy a new one, or to do a straightforward sale & purchase of his house and keep renting out my flat to contribute to the mortgage.

Firstly do banks take into account earning from rental properties when deciding how much to lend to you?

And secondly, what would you see as 'fair' in terms of how much we should put into the mortgage for each scenario?

Thanks for your help x

How will you be splitting the bills if he earns more than you? Do you have a date set for the wedding and do you plan to pool all finances?

The wedding is booked for 1st May next year. I havent paid towards bills in a while as been on mat leave, but we will be paying them from a joint account when I go back. Yes we plan on pooling finances.

If you took the rental income from your property into account would that take your income up to a similar level to his?

If you didn't sell your house would you still be able to contribute a deposit?

I'd avoid selling the rental house if you can possibly make it work as it is an additional income stream and a decent investment.

Don't "give" him half your money if you aren't married - his bigger income means nothing to you if he leaves you unmarried, but a 50/50 purchase of a house would almost certainly let him leave with half your deposit.

I would speak with a family solicitor about your options. I would consider the possibility that you would be financially better off in the event of a split should you remain unmarried, but that would depend on how much equity 5x is.

Do keep in mind that marriage for a woman should offer protection again the financial damage of having children. Make sure you won't be in a worse position from having married.

How much equity are we talking?
Are there other assets?
What is his spending history (if you are part time but have 5 x the equity)?
Do you expect an inheritance?

Those are all relevant questions. Do please consider them carefully.

I do understand what you're saying about remaining unmarried, however it is really important to me & something I want to do for our family.

At the moment I am erring towards keeping my flat, and either paying the bills on the new house, or paying something towards the mortgage, it is just calculating what.

Does anyone know if the bank will take my rental earnings into account when deciding how much to lend? If so we could probably buy something in the region of ~300k, if not then I would sell the flat as the sort of house we have in mind will be worth more than the current house.

Hope this all makes sense, my brain is in a right pickle!

I'm not expecting any inheritance as the large deposit for my flat was my inheritance.

Obviously if I paid towards the new house I would expect some kind of share in it that was proportionate to the amount I was paying.

Is it likely that he will have any inheritance and how much and how long from now?

This is such a mercurial question, I know - but given all the inheritance you'll ever have is in your flat, a divorce could be permanently catastrophic for you. As it's so often the women left holding the children, this is a particularly crucial consideration.

If you feel strongly about marriage, I would strongly advise you speak with a good family solicitor about what might be done to protect your financial position from divorce.

@PicsInRed

Yes it is likely, his parents own a fairly large house in a nice area as well as a holiday villa abroad. They are in their 70s.

I suppose I could sell the flat, we both pay half the deposit on another house, and buy a smaller let with the money left over?

What is your pension situation? Is there equality there?

Speak to a decent mortgage broker. Rental income will be taken as income in most cases but so will any outstanding mortgage on it.

@PicsInRed

If you feel strongly about marriage, I would strongly advise you speak with a good family solicitor about what might be done to protect your financial position from divorce.

There isn’t a huge amount that can be done as protection, as far as I’m aware pre-nuts still aren’t recognised in the uk. But marriage and divorce aren’t the same as they used to be. More account is taken to what you have put into the relationship and the length of interdependency rather than just a straight 50/50 split as it used to be years ago.

You could protect your large deposit by buying as 'tenants in common' rather than 'joint tenants'. I would then pool your incomes and ensure that both of you have equal amounts of spending money after all bills have been paid.