Opinions and advice desperately wanted!

[misamisamisa]

hellooooo, please could I have some opinions, I feel so overwhelmed!
we are looking to buy a new house to upsize to a 3 bed and all the options are making my head spin.
my partner and I both own a house. I own mine outright (inherited) and it's currently empty. My partner owns a house (living in it now) and it's mortgaged. His is worth approx 200k (maybe around 70k of equity in it) and mine approx 170k. To add to this I have 77k of cash I can add into the mix. So basically, we have two options and I'm not sure what would make more financial sense. Could anyone advise what you would do?
Also - we're not married.

Option 1) Sell both houses and invest in a really nice house at around £300-£360k

Option 2) Sell one of the houses and use the 77k to get a more modest property around 250k (standard price for a 3 bed where we live but most need a bit of work doing) and keep one of the houses as a rental for secondary income stream

I see it both ways, I'm keen to keep hold of a property (ideally mine) and use it as a rental to supplement my maternity leave pay. But then on the flipside would it be better financial sense to invest in a more expensive house? It'd also be significantly less work, I've never rented anywhere out so a huge learning curve and unsure how this would even work when we've got a newborn

Please help, I'm really new to all of this stuff tbh

I would sell both houses and buy somewhere together which you have contributed a similar amount into. Put them both on the market and move into whichever one takes longer to sell so the first one to sell has no chain your end.

Well I’d suggest getting married so you cover yourself financially.

Otherwise you both need to put in the same equity. So option 2. Renting out is not hard. Just do it yourself, vet the applicants, be ruthless in deciding who to rent to. It’s a bit stressful at the time but find someone ‘normal’ who you can have conversations with and is t going to be ringing up when the light bulbs go.

I wouldn’t rent something out. It’s super hard work, risky, and really complicates your tax position.

If I were you I’d sit down with your partner and an expert to decide on options which protect both of you and your child. The thing about not being married is that you have to consider what might happen if you split up and put in place measures that would be in place automatically if you were married. Which all feels a bit depressing but it is better to do it than not.

And then, as @Twiglets1 says, sell both properties and move into one to which you will both have contributed equally.

I’m not sure you should put so much more in than DP. What if you separate down the line?

I would buy one together HOWEVER I wouldn't max out any mortgage.

Protect your financial interests (and his). Own the house proportionate to what you each put in and pay towards any mortgage.

You need to discuss and agree NOW how future costs will be shared:
Mat leave loss of income
Loss of pension contributions
Childcare
Child expense - clothing to activities.

Many men seem to see child related costs as the Mum's like it's her hobby 🙄

Also division of household and parenting duties, another thing that is too often seems as the woman's role whether they work FT or not at all!!!

You should speak to a financial advisor so you have a clear understanding of your financial security long-term, whatever you choose to do. Don't take advice from randoms on the internet.

We're in pretty much the same position! Selling mine and living in his for a little while longer to save a bit more money and then buying somewhere bigger. Do either of the current properties work for your new family, or is the more expensive option what you actually need fur the future?

Would getting married not actually compromise my position? I’ve got more cash and a mortgage free house, I guess if we got married everything would be ours jointly so maybe worse.

Thank you, we have booked an appointment with a financial advisor as fully agree. I think I just wanted to know what others would do in this situation but thank you

Hope it all works out for you! The basic options work, but I hadn’t considered that with a more expensive house there’s also an uplift in value. Hard to know which way to turn but we’re going to sit down with a financial advisor and take it from there probably.

Keep your inherited house as security as you're not married.

Yes! Don’t get married- what you need to do is buy any joint property as tenants in common and not joint tenants, in proportion to what you put in ( slightly complicated if there is also a mortgage but again just contribute proprtionateky) This means that if you die you can will your bit to anyone you want ( but so can he). If you’re joint tenants the other one will automatically inherit it. Also if you split, with joint tenants it’s 50/50 ( basically like a joint account- you are both deemed to own all of the house).

I think you need an appointment alone with a financial advisor.

No one goes into a cohabitating relationship with anything other than the belief it will be permanent, but….

Agreed.

On reflection I would keep your house and rent it- you don’t have a mortgage so its unlikely to be loss making and can generate you a monthly income. Then both put 70k into a new property ( he sells his, you use cash) and get a joint mortgage. Then the tenancy matters less as it’s 50/50 anyway. The inheritance still matters but as I mentioned above, it’s double edged. Could both give the other a lifetime interest if tenants in common.