House ownership in a relationship

[Duckling771]

Not at the stage of the relationship where we're looking to move in together and combine finances
But out of curiosity wonder what others do in similar situations
I own my house, he owns his, both have mortgages, but in effect we could combine finances and be mortgage free in our early 30s if we wanted to
Neither has children to consider

1. Would you rent one house, move into the other.
2. Sell one and pay off one mortgage and split house by amount paid by each
3. Sell both, buy another
4. Something else?

Just to add I'm not the marrying type, have more money in equity, similarly paid jobs. I know people think you should marry for financial stability but when you have the higher level of assets it actually creates instability for you

Interested in what other people do in these situations

I think what I’d do is sell up, move in together but have an agreement drawn up which is clear if you did separate in the future, the sums you each put in are ringfenced (so if you have more equity to put in, you get that amount back) then any gains in value/equity over and above that are split equally.

Makes sense to me in order to be mortgage free and not pay interest, and less hassle than renting one property out.

NB I haven’t been in this situation as we were married and equal contributors, but in your shoes that’s what I would theoretically do

Could there be any benefit to renting out the second place?

@Yellowdays the only thing I suppose that would be beneficial about renting out the other house would be potentially we would each fully own a house each eventually then, although we would still both have mortgages for a while
Whereas if we had one house, no mortgage, we could each save the amounts we were paying on seperate mortgages

Initially I'd keep both houses. Sometimes moving in together works perfectly, other times you discover that you're not as compatible as you thought you were...

I'd rent out the second house for the first year or two. Go via a good agency - rental income might not fully cover your costs but if you're used to one person paying full mortgage anyway then that should be doable. Focus on finding excellent tenants. Build up a slush fund for unexpected expenses.

Then once you've decided that they are your forever person and absolutely lovely to live with I'd combine finances.

If I wasn't the marrying type and didn't want children, then I'd stay firmly in my own property. If I was either of the above, then I'd get married first, and the rest will be fine.

@DoTrollsShitInTheThreads I may have children at some point, I think this is seperate to the marriage choice. Marrying wouldn't offer extra stability, as I have the higher level of equity

Anymore opinions? 🙂

I was in a similar situation before I married DH and renting my place ended up being a huge waste of money and financial burden. I can see the appeal for the short term, if you want to have the back up in case your relationship doesn’t last, but I’d recommend selling both and buying somewhere new (which suitable protecting yourselves financially, both now and in the future).

My DH and I were in a similar situation when we met but we knew we wanted to get married and share a life ... as well as a property. So we each sold our own homes, got married and bought a joint home together. About twelve years later we paid off the mortgage. That was 35 years ago and if we split now I am not sure either of us could remember who put what in ..... that probably doesn't help your decision much but just gives you an idea of what other people do.

I feel like it's a bit of a funny one, if you rent one out, you get the hassle and expenses, sorting tax, mortgage wouldn't be fully covered by rent, 2 houses maintenance. But combining seems a little risky if you ever split, although I guess it's easier to save I'd neither are paying for a mortgage
Selling both and buying a new house seems like a fair bit of effort and money as either house is suitable to live in.
I'm not sure there's a perfect solution

So refreshing to see this perspective on Mumsnet. Marriage is a mugs game for high earning women- you get the wife work and lose the assets!

@WesterosGreen haha thank you. I get that people go into marriage hoping it'll last forever, but when the divorce rate is so high, why risk losing so much money if it all goes wrong? If you don't get married then if it'll all goes wrong, no divorce hassle and don't chuck £1000s down the drain. Maybe not a very romantic view, but hey 😂

What about
live in one
Sell one
Equity invested into house being lived in as tennants in common. So the other person buys a share of the property being lived in.

If you keep both houses and rent one out, it's then no longer a primary residence for capital gains tax purposes. He'd have to move back in for a year to avoid that I think? I'm not an accountant but this happened to a friend who separated and reunited with a hubby who'd got another house. Worth checking anyway.

Ohhh didn't think about possible capital gains if we kept one for rent, that's a good point, also I imagine would need a special buy to let mortgage

@Forestdweller11 yes I think that would be my preference, the only issue with that is having to split the equity in the event of a split up, but I guess the original buyer would just have to get a mortgage for the other person's percentage

I had the house and the money when we married. DH had the prospects. We had a pre-nup that safeguarded my assets.

@RosesAndHellebores I might be wrong but I think in the UK prenups aren't legally binding
I think they can take it into account, but they don't have to. So it'd still be a risky game

We had this, my flat was larger, nicer and a better location, but more importantly it was my sons home, so we kept my flat and sold his. We didn’t rent it out as we didn’t want the faff, so we just left it empty until it sold. We then used the equity to buy a little holiday home and to pay off some of the mortgage on my flat.

I think there's been case law since 1991. However it did have some.value not.least because DH was happy with it and would have honoured it. It just secured my proportion of equity and personal money at that time. It was irrelevant by the late 90s when DH's career took off.

Rent both houses out so you both still own a house each and then buy a house jointly together, that way later on in life you will both be financially better off later in life when all mortgages paid off