Moving in together dilemma

[Gemforfreee]

I am looking to move in with my partner in the next couple of months but struggling to work out how to manage finances.

Currently our finances are completely split. I own a house outright and partner has a house with a £70k mortgage outstanding.

Plan is for me to move into his property which we would like to improve. I have offered £70k from my property to allow us to do this.

Dilemma is how to manage this ‘loan’ and our expenses when we live together.

I think it’s fair to split utility bills, council tax, food and any other running costs equally. I don’t think I should pay off part of his mortgage when my name is not on this property.

Second part is the loan. My partner think I should put the money in and then if anything happens (ie he dies or we split) I would get £70k back and nothing more. This doesn’t sit right with me.

Any suggestions of ways forward to manage our finances or what I should put in place to protect myself

What will happen to your property? Are you planning on renting it out?

That’s another dilemma. I’m not keen on letting it as it seems a bit of a minefield. If I go that route I will sell and buy another property to let that’s closer to where we’ll be living.

Alternatively, I sell and invest the money to give me a nest egg should things go sour and I need to buy another property. Eventually I’d use it as part of my pension

Surely if you move in and start paying 50% of all his household outgoings that leaves him with more disposable income to find renovations to his own property himself?

Why would you be paying for renovations to a property that you have no legal entitlement to?

If he refuses that you're investing in the property, then you're just loaning him £70k and he'll need to pay interest on the loan, otherwise you're losing out in every way.

Realistically he also needs to ensure he has a very clear 'rental' agreement or he takes 0 towards his mortgage. Anything else puts him in a precarious position regarding you contributing to the mortgage.

(I've been around this block twice..)

Better would be that you are investing in the proportion of the property which the £70k would buy you and that you have a legal agreement drawn up to indicate that with your % increasing in value alongside his.

For me it would be the above, a current % loan, or fuck all.

You need long term financial advice.

Your house will continue to appreciate in value and provide a taxable income from rent provided you keep it in good repair. You will have ongoing running costs on this house or if you were to buy a different one. If you sell and buy, these costs are ones that will not be incurred by your partner and should be reflected in the partnership.

If you take £70k out of your house to fund renovations on your partners property or to pay off his mortgage, you will loose out on the income generation and capital appreciation of this money so this should buy you a stake in the capital appreciation of his property.

You should benefit from costs that you contribute towards in your partners property which result in increasing or maintaining the value of this asset. If you contribute towards the renovation, you should benefit from the increase in value associated with it. If necessary capital repairs are carried out (roof, kitchen, bathroom, windows, doors), these will in part be ensuring the value of his house does not decrease..

You will both benefit from sharing utilities, you will benefit from getting post tax rental income on your house and he will benefit from sharing the capital costs of his property and the increase in value on his house.

In his loan proposal, how would he propose to repay that if you split up? He would either have to remortgage or sell and you would have no power to enforce this. With such a significant investment on your part, you would be wise to secure it by having your name on the deeds in proportion to your stake in the house.

The 70k will add value, and if invested would be more than that when you got it returned, however that happened, death or separation. I wouldn't be chuffed to out in an investment, even to a property I would be enjoying, to get feck all out of it

Also... if your house will provide income for your pension, of you split, you could also need somewhere to live.. is your house enough to provide both? If not.. you may need another plan..

So he thinks it's an interest free loan then? That's not right. You are going from mortgage free to having to pay a mortgage payment and interest.
I'm not sure I would be putting myself in this position tbh. He sounds like he's getting the better deal. He gets a fully renovated house that you have no claim over and will increase in value.

Do not give this man £70,000 on the proviso if you separate that he will pay it back to you!!!

That would be crazy and foolish

What to do is if he wants to make renovations then he borrows the money from his mortgage company

If you move in then you pay half of the bills and a token rent?!?!

or sell both your houses and buy somewhere together

then if you pay more towards the house that’s reflected in the deeds ie you own 60pc him 40

And also imagine if his house is now worth 200k then you give him 70k

then his house is worth 350k after renovations

Erm hello where does that leave you?!?!

70k out of pocket

and paying him rent each month!!

don’t be foolish

Get a deed of trust drawn up. We have this as DH put £50k into the deposit. I put £20k into fees / improvements. We have a deed of trust drawn up to say that I will not get any of the £50k, but I will get back what I've put in and a 50% share of any profit.

All the above advice is good. Heed it.

My question is, how well do you really know this person? As in REALLY REALLY KNOW them?

All this talk of big money and no real gain on your part is waving a big red flag over my head - there's no rush to move in is there?

Stall for a while/6 months/year and think. this. through. Watch him and listen to him when you say you'd like to wait a while longer before moving in/deciding to part with your money - his reaction will tell you all you need to know.

If he gets a £70k 0% interest loan off you, he gains at your expense.
More sensible would be to contribute 50% food, council tax and utility bills releasing more funds for him to do up the property.

As you say, don’t contribute to mortgage if you’re not on the paperwork for it.
However, if you were to rent your property, you would be gaining and he could argue, at his expense. Perhaps an additional contribution to him from that income that you both agree to?

Its complicated and that’s why DP and I continue to live apart but we’re both happy with this and it’s not for everybody.

I'd be very reluctant to get into all of these complications before you've even lived together.

Just no.

I'm single and own my house but with a mortgage. I will never risk the financial security I've built up for the sake of moving in with someone, so the only way I would do it would be if we were both in a position to put the same amount of money into a fresh property so that everything would be a clear equal split if the relationship ended.

Yes, def complicated.

My plan if I let a property would be to downsize to a 2 bed and invest any surplus in my existing defined contribution pension to boost it up.

If I needed my own property again, I could move into the 2 bed which is all I need.

I agree that if I let, then it would be fair to share some of my letting income into the main pot

See a solicitor OP. This is too big an investment just to put into someone else's property without taking legal advice in securing your money and ensuring you get it back plus any market/percentage increase if/when the property is sold or, if anything happened to you, to the advantage of your beneficiaries.

A PP mentioned Deed/Declaration of Trust. Ask your family law solicitor about this and get them to explain how this works and getting your name as a co-owner on the land registry/Deeds. Don't just rely on Wills - these can easily be changed without knowledge of the other involved person(s). Your partner currently has everything in his favour - you need to ensure that everything is properly balanced - even though he may well be "hurt" you don't trust him.

Ensure you have a copy of the Deed of Trust as well as your partner and that a copy is lodged with the solicitor dealing with this. Trust but Verify. 🌹

Do not make a mess of this.

You both need to sell each of your houses and buy one together with a joint mortgage and ring-fenced deposit amounts.

Any other option will be a nightmare.

Why would you be paying for renovations to a property that you have no legal entitlement to?

This

He very, very, no, seriously very wary of anyone who is "careful" about protecting their investments from you.

Expecting an interest free loan of £70k from you with no interest, no capital appreciation. For a property on which you do not have any title.

Just no.

And him even suggesting it and wanting to keep to that. He is showing you who he is.

Maya Angelou said, very wisely. When someone shows you who they are, listen.

Believe them from the start.

Protect yourself. That does not include unsecured interest free loans of £70k. Protect yourself from anyone who would even suggest that never mind keep to it.

How would you get it back in the event of a split. It's not a very romantic view but it makes life so much easier if you have an agreed plan of what would happen if you split.

Definitely doesn't make you more likely to want to split. If you can see that the agreement is fair then it makes it less likely that you would want to split.

If you do want to split, it makes it a lot more likely that you to split with no big drama. Very useful.

Op you need proper legal advice.

The poster above asked how well do you really know this person. The answer from a divorced colleague is you don't know how nasty someone can be until you've split up with them!

I wouldn't be putting £70k into someone else's property without my name on the deeds.
You'd have nothing to make him pay back a loan. Even if it was legally written up. Could cost a fortune going via the courts.

What would happen if he dies, who is he leaving his house too? Could you be made homeless?

Might not be the answer you want but marriage would give you some protection.

Seeing a solicitor sounds like the way forward.

Thanks to everyone for contributing some sound advice.

I would really benefit from some long term financial advice but most financial advisors I’ve looked into just want to look at consolidating pensions or switching them around. I’d like a holistic review to understand what options I have. Perhaps a subject for another thread

@Gemforfreee - did you read my post up-thread? I'm just highlighting it, in case you've missed it - no need to reply on point, but some things there for you to consider.

Regarding financial aspects, I find Holly's blogs on Boring Money really interesting - just Google it.

Good luck OP, just take your time and above all else protect YOUR assets over your heart.

@VulpesVixen agree, taking my time to get this right is the way forward. Seeing a solic will give me some solid facts to bring to the table

This sounds messy. A simpler solution could be

• don't give him a loan. He can borrow from his mortgage company

-split utility bills

• you pay him some rent for staying there

I can see why he would want to keep you off the house deeds and I can see why you shouldn't give him a loan.

Perhaps think what you would do (in terms of utilities/rent) if you didn't own a property or have a lump sum to offer him. Lots of couples rent (i.e., you pay out a sum to live somewhere and don't have a claim on the property) and lots of people live in a property their partner owns. I think giving him the "loan" is the worst thing you could do, it feels like a situation just waiting to go wrong - just pay him some kind of rent and have no claim on the house.

Any rent that Op pays should only be a portion of the interest he is paying on his mortgage.
Paying anything more off the capital is like helping him pay his mortgage lining his pockets.

Op do not let yourself get into a situation where in 20 years time. He's sitting pretty house paid off, that you've invested money into. And he decides to spilt.

Leaving you looking at your bank balance thinking I can't afford to buy anywhere.
Make sure you are continuing to put money away every single money Lifetime ISA or similar so if it doesn't work out you aren't in a shit position.