Adding partner to mortgage, can anyone help me work this out?

[LadderLady]

Struggling to get my head around the best way to do this. I own a house worth roughly £200,000 with a £60,000 mortgage. My partner and I were looking to move and buy somewhere together but can't find anything so we'd like to stay in my house.

Partner has £20,000 that he'd like to invest in the property. We'd then like the remaining mortgage to be in both our names, and borrow an additional £30,000 to do some home improvements.

Need to then draw up an agreement to say who owns what percentage? Or maybe protect our initial money (so if we were to split and sell, he'd get his 20 back, I'd get my 140 equity back and then any additional profit be split 50/50?)

Would we pay off 20k from my mortgage then borrow 30k between us?

Do we use the 20k for improvements and just borrow 10k, add him to the mortgage and I'm 'giving' him part of the house because he's using his money to add value? And would that come from my current equity?

I hope I've explained this properly, I've spoken to my current mortgage provider and they weren't much help, just wanted figures. Maybe we need to just speak to an independent advisor?

How old are both of you? How come he only has £20k to invest? No wonder he wants in on your property!

Your mortgage of £60,000 is low and affordable. You don't need his £20k so all you're doing is creating an instantly more complex financial arrangement by getting him involved. The minute you take that money, it ties you together in not a helpful way.

whats the rush to change something that presumably works at the moment?

Why on earth do you want to put him on the mortgage?
tell him to keep his £20k and invest elsewhere then it’s clean
re the house renovations, can you come to an arrangement here in that you get a joint loan but he pays his loan payment instead of a mortgage payment until the loan is paid? I don’t know what the answer is apart from not putting him on your mortgage, I’ve seen so many of my friends get screwed over like this

My friend did this a few years ago. She just had to sell her house and move into a flat as they split up. Be very careful. Definitely best to use percentages rather than amounts of money in an agreement and get a proper valuation first not guesswork, otherwise if you ever split up you would be in real trouble….

Don’t do it.

Its a bad idea OP, you don't need his investment - assuming you put him on the deeds as tenants in common with a defined split, you break up in a few years, lets say his investment has grown a little to say £30K -

He can't take half the house, but he can, as a co owner force a sale, meaning you either have to find that money PDQ to buy him out or sell up to pay him off.

Keep it as yours, keep your security.

When I looked into this with my DP the mortgage company said no as his credit history was dodgy Thank god they did. Turned out it wasn’t just his credit history that was dodgy. I breathed a huge sigh of relief that he had zero claim over my home when we spilt up. If you’re not married to him, don’t do it! This is your financial security you’re giving away.

Also, consider what negative equity may look like. Don’t say he gets his £20,000 back first when you’ve sold the house, in case the house value drops from £200,000 to £150k.

Be very careful. Can you afford to give him his ‘share’ if you split up? If not then don’t do this.

If you split up and he wants his money back and you don’t have it then you will have to sell the house to buy him out. Do you really want to lose a valuable asset?

I agree with others that he should invest his money in his own property.

How ridiculous! MN advice is not to get married at any cost or in every situation, it's context specific, people aren't as daft as that - marriage provides a protective financial safety net particularly to the woman who gives up work to have children, while the man continues to amass savings and pension. In this situation, marriage doesn't protect the woman at the moment while they have no DC but she has the asset of a house. So who is saying to the OP "get married and give away your hard earned asset" !

in this situation it's proceed with caution because once married assets become shared and get a legally drawn up agreement on the assets that predate the marriage that both people agree is accurate.

@LadderLadydo you have children?

Spend some time on the relationship or divorce boards and you’ll realise pretty quickly that this is a bad idea

don't do it!

Don’t do it!

Absolutely not. Adding to the 'do not do this'!

As someone in a similar position, living with my partner in my house, I think you’d be mad to do this. Don’t do anything to risk your investment. If it all goes wrong he could potentially take a share of your home.

The fact is this guy can’t afford to buy a property, that’s why he wants in on yours or your equity.

I see absolutely zero benefit to you in adding him to your deeds and/or mortgage, or buying something with him, but plenty of benefit to him.

Even selling yours and buying something else together - you’re bringing 140k to the table versus his measly 20k. The disparity is huge. Has he even got the funds to pay solicitors, stamp duty, removal costs, etc?

You’d be insane to go ahead with this.

i wouldn’t do it, the different those 20K will make to your life is not worth the hassle if you split up.

as others have said, splitting the profits 50/50 is unfair since his contribution is so much smaller than yours. also, i’m assuming you would have it valued now and those profits would be calculated against that increase, not the difference between when you purchased the house and when you split up.

sorry to keep talking about splitting up, but it’s in order to work out if the risk is worth your while.

if he wants to contribute towards the house, then use that money for the improvements and if at some point you split up, pay it back to him and agree now to an interest rate.

I don’t think it’s always a terrible idea, but in your case I would definitely ensure you protect your uneven shares. I’m doing similar with my partner. I originally bought the place with a 10% deposit but he’s investing 3x as much as my original deposit. Rather than protecting his bigger share we’re going in as joint tenants, so if we split and sell I’ll get more back than I originally put in. I think this is fair to compensate for me giving up the security of owning the place solo. It’s worth it for us as it will halve the monthly mortgage repayment, but if I had a mortgage as small as yours I think I’d have carried on in my name only tbh.

These replies are hilarious though because if a man was refusing to add his female partner to the mortgage or refusing to get married he’d be called all sorts of names.

Don't think OP is coming back.

@LadderLady you have considerable property assets and he has sod all to his name. And you are considering letting him put his name on your stuff, he certainly saw you coming didn't he.
Don't be a mug!

Usually the woman has made sacrifices, given birth to his children, done the unpaid domestic work so that he can concentrate on his earning potential.

Definitely take advice and have a tenants in common agreement to protect yourself if you go down this route. Why does he want to be on your deeds/ mortgage? Has he got or previously owned a house himself? If not, why not?

Will the £30k loan be used to add value to the house or is it for repairs and maintainance? How will you split mortgage and bills?

You also have to consider what his contribution to the mortgage / loan will be? If you both pay off the new £70k debt (60+30-20) equally he will then probably feel that he owns at least £55k (35+20) of your house. If the house value remains similar he could own almost a third but you have only actually gained £20k, are you comfortable with that and could you afford to buy him out if you split or might he one day be able to force you to to sell?

Why has he only got 20k to invest? What’s his financial history? Of course he’s wanting to jump into your investment, little risk for him and potentially lots of gain. And you would only stand to lose if it all went wrong.