Partner moving in - Arrangements regarding property

[Dacquoise]

Hi Everyone,

My partner is shortly going to be moving in with me to start a new life together. However, we have hit a bit of a bump regarding the arrangements about property ownership and I am wondering if anyone has had the same experience and can give me some suggestions.

We have been doing a lot of work on my house which has a mortgage in my name and is in my sole name on the deeds. I have around 70% equity in the property. The intention is for him to buy 50% of the property making it joint ownership.

However, he can't raise a mortgage on 50% of the property but doesn't want to cash in his investments or pension to pay off my mortgage and give me the money for the other 20%. He would like to take over the mortgage payments and give me lump sums for the rest in installments which is okay, only he wants some assurance for the amount he has already paid out i.e. he has financed the work we have done on the house with a view to offsetting half of it against the cost of buying his share of the house.

We have looked into drawing up a beneficial interest but my mortgage company want him to go on the mortgage to do this. This would effectively make me equally liable for the mortgage although technically it shouldn't be mine as he would be paying it to pay for his share of the house. I am also not keen on the expense of going through the mortgage process with him when the mortgage is already fixed at a very good rate.

Any ideas/solutions regarding this would be greatly appreciated?

I'm sure someone more qualified will be along shortly but personally I wouldn't be doing any of this at the offset of moving together. A year or so down the line, or if you subsequently marry, then yes ... but right now? I'm married almost 2 years now and DH has zero claim on anything I acquired/accumulated pre wedding...everything is in trust for my son. I'll likely change it going forward but right now I've protected myself and my DS.

Hi @Mum4Fergus, I have thought long and hard about this aspect of our relationship and we have been together long enough for me to feel and know this is right for us. Our intention is to be joint owners of the house, not to get married again and to keep our finances pretty separate. We are both in our fifties, been through horrible divorces and have thought of every eventuality, particularly what happens if we split up. We both have enough resources to survive separately so it's a considered risk. I would agree with you if we were younger, likely to marry or have children and would advise my daughter the same but thank you for your response.

What benefit does selling half your house to him bring you? Can you not offset the amount he has paid for renovations against future rent. He can then purchase another property or other investments to secure his future?
I really wouldn't be selling equity in my home. Regardless of how reasonable you both think you would be if you split you really cannot bank on that being the case.

Hi @Howyiz, our choices were to either buy a house together which would mean selling mine or stay where we are and have joint ownership. As we both like my house a lot we have done it up together to both our tastes. We have decided to make a commitment together this way but not to marry. We don't want the hassle of other properties, have enough other investments/pension funds each. My daughter, who is an adult, will be well taken care of if anything happens to me and I also have life insurance for her.

The intention is to spend the next twenty years of our 'go-go' years having fun, travelling, retiring early. It's all positive and as I said we have considered the risks and decided to go for it!

Just to be clear we are aiming for equality here. Equal ownership of the house we share/maintain. We have similar pension pots. My salary is less than his but enough for me to live on alone if necessary. We don't intend to complicate things by marrying as we both realise how difficult it is to untangle that mess.

He would like to take over the mortgage payments and give me lump sums for the rest in installments

NO.

He has investments he could cash in to buy onto your property, but he wont do this, he will make instalment payments but he goes on the deeds immediately?

He sounds suspiciously like a grifter and/or a cocklodger - who either actually has no investments or has investments but has no intention of sharing his assets with you but expects half of yours immediately.

I would cancel any idea of putting him on the deeds and keep the house in your name. It will be a big help when you need to get him out.

Do not ever give away a hard won house. Women can and do find themselves unable ever to financially recover from such mistakes.

Don't marry him - good choice.

OP,
This does NOT sound in your best interests.

Why would you do this?

Have you NOT worked hard for this asset?

I think you are being extremely naive and may hugely regret this decision.

What's the rush exactly?

I would slow down and seek legal advice.

What happens if after a year your relationship breaks down?

You have handed over half your house and have a huge complicated job of separating and maybe having to sell the house.

Focus on how you would separate from him if you have done this.

It benefits him hugely but NOT you.

Not a property lawyer...but I wonder if you should have drawn up some kind of contract defining the percentage of ownership, should you split before he has paid off the further 20% in instalments? Just because he's on the deeds, doesn't mean he's automatically entitled to half, as i understand it, but as i say, not my area. I would speak to one - I'm sure you trust him, but these things can get nasty and complicated. If you did split, and he had only effectively bought out 30% of the equity, would you want him getting the extra 20% for 'free'?

You want a situation where you are able to calculate what he has paid off in terms of mortgage and lump sum. And I don't think he should object to that tbh...

Don’t do it OP. Leave the house in your name only and let him pay rent. Repay whatever he has put into refurbishment out of his rent.

It would be madness to sign over half of your house.

You need proper legal advice. But I would give him whatever % he's already put in through the renovations and review it every few years. If he wants more then he can sell his investments. He's expecting you to give up your security (equity) but he won't give up his (investments). Seems a bit of a red flag to me

If you want equality why doesn't he get a rental and you keep your house, then you have one each.

@wishfuldreamer, you are thinking on the same lines as me. I need to give him some sort of assurance about the investment he has already made in the house. I have NO intention of putting him on the deeds or handing over half without the mortgage being paid off and the rest of the funds being handed over. I am not that green!

I am trying to be pragmatic and fair about the whole situation as he has already paid out a lot but legally has nothing to show for it. I did look into a beneficial interest contract but, as I said, it would involve a joint mortgage which is not a good outcome for me.

I don't have any worries about being taken for a ride by him. He is very straightforward, honest and open about his finances and I do know he has the investments he says as I have seen them. From a financial perspective it makes more sense for him to pay off a very low interest rate mortgage than cash in lucrative investments. He isn't expecting to be given half the house.

To answer a previous poster, the benefit to me to sell half the house is that I have money to reinvest myself. I can give my daughter a deposit for her own property without using my pension fund which continues to grow and have a large sum spare to be able to retire early.

I can understand some posters concerns about red flags, cocklodgers etc but I have thought this through. I would have probably downsized if I ended up alone and it is nice to be able to share the responsibility of maintaining the house with someone who is invested in it.

Despite my own poor relationship experiences, I remain an optimist. This is the best relationship I have ever had by far, we are well established and this is the next level for us.

He wants to live in your house. He can't raise 50% of the mortgage. I agree with pp if you want to live with him he can move in and pay rent in the house he wants to live in but can't get a mortgage on and everything stays in your name

This is foolish in the extreme and you really need to hold on to your assets not give them away. I have seen this happen so often where women have been generous toward a partner and live to regret it 5 or 10 years down the road. Really, please reconsider. You need to look after yourself and not him.

If the property is in your name only

Why not keep it that way

Charge him rent or if he does DIY, then he pays less or no rent

You are under no obligation to give away any of your property or assets

Why would you give away anything ?

Oh dear, this thread seems to have taken on a life of it's own! No one is giving away or being given anything they aren't paying for. No one is being ripped off! Not sure how I can make it clearer.

Thank you everyone for your input. There doesn't seem to be any practical advice for the question I asked so I will bow out now.

OP is he paying you 50%of the original mortgage or of the property at its current valuation?
Can you get a legal document drawn up whereby it states that after x amount of installments your dp will own 50% of the house but should you split you have first refusal on buying the property back at the same rate as his original investment? I would caveat that should the house devalue so too would his investment.

Op, please don't disappear as I know the posts are alarming but there is concern. How long have you been together?

Where is he living now? Does he have a property to sell or is he renting?
What value has he paid out for the renovations? Could this be in lieu of rent?

I think that he is being very wise, not cashing in investments and looking to build additional assets, in the way of equity in your house. You are getting an improved house but you are also diluting your appreciating assets in favour of cash, which is not increasing.

If you have a large sum of cash would you feel more responsible for paying out if he is cash poor but asset rich?

I think the flag here is that you should have equality of risk and potential gain and from what you have outlined you seem to have taken on a higher risk.

I would recommend you plan an exit strategy with him, assume that you might decide to part ways, what would that look like? If you are happy to downsize then fine but articulate it and have it documented.

It is harder to separate finances when you are older as you jwon't have the options you have when younger as he is finding in regard to acquiring a mortgage.

You need a deed of trust, drafted by a solicitor, so you will have to take legal advice, as will he, separately, for it to be valid. However you may be in breach of your mortgage terms and conditions doing this so check these very thoroughly before paying for legal advice. It really is not a good idea from your perspective.

@Dacquoise the other positive side of a deed of trust is it can and should contain what the financial arrangement would be should you separate.

If you went ahead and shared the ownership, what would happen to your share of it if you died? Presumably you'd want your daughter to inherit? Would you expect your partner to move out and sell the house?

We all know someone who died in their 60s and someone else who died in their 90s - would your daughter have to wait decades to inherit?

Personally I'd say each have your own home, live in yours with shared utility bills, rent his out, and split the profits on the rental between you. So you could pay off your mortgage earlier and he could pay his mortgage with his profits.

OP, sorry, I was in a very similar situation to you 5 years ago and it's a big NO from me too. Ended very badly, I could have lost my house. If you have made up your mind to let him move in, I agree with Cinderella66 try to get some sort of legal agreement in place to cover yourself if living together doesn't work out.

Why can't he raise a mortgage for 50% of your house? Why does he want to take over paying mortgage payments?

You need legal advice. See a solicitor.