Combining finances - deed of trust

[No1toldmeaboutit]

i have been with DP for 4 years and living together for over a year. He owns the house we live in and has 2 years left on a very low fixed mortgage deal.

i have recently sold my property so have about £80k from the proceeds of this sale. We intend to combine all finances now I am no longer paying for my property and have decided to put everything into one pot.

we would like to pay the £80k off his mortgage and keep the payments the same so as to pay off the mortgage quicker. we will both be contributing to all household related bills.

now my issue is that I need to have some protection that should anything happen to him I won’t be made homeless and have nothing to show for my contribution towards the house. It makes no financial sense to remortgage at this stage due to the penalties and the really good mortgage rate he has. We have discussed a deed of trust but I just wondered how would this be documented?

the bit that’s confusing me is how is the share calculated? If my £80k is 20% of the value then I understand that I get that I own 20% but what about the 50% I will be contributing to the bills from this point forward?

has anyone done this before and can offer any advice?

we intend to get married also so not sure where that leaves us either

Don't do it. Why would you even think about paying 80k off his mortgage, if you aren't on the house deeds or the mortgage!

My Deeds of Trust stated I got my money back and the equity was then split 50/50 once I had.

I wouldn’t give anyone £80k to pay off a mortgage unless my name was on the deeds. Not in a million years.

DONT DO THIS ! Yes I know I’m shouting. But please don’t.

You are not putting everything into one pot. You are putting all your money into his pot.

Use your £80k to invest somewhere safe that brings a good return.

And even when you marry, don’t give him ANY of your money without getting YOUR OWN legal advice . Not shared with him. I promise it will be the best few hundred pounds you have ever spent.

Another one here 🙋 saying don't do it.
If you split up in 10 years (hopefully you won't but who knows), you'll get your 80k back and if you're lucky 50% of the equity accumulated since you put your 80k in.
Chances are that money is not going to get you back on the property ladder.
I'm going to assume as he has two years left on his mortgage that you're both not young?
If this is correct, think about whether you'd be able to get a mortgage (age wise) if you split.
Personally, I wouldn't pay into a house where I wasn't on the mortgage, married or not.
Get some legal advice.

If he has a good mortgage rate keep mortgage just him. Put your £80K in high interest accounts - many places have almost 5% interest rates right now which will be better than his mortgage rate. He pays his mortgage, you keep putting money into high interest savings e.g. regular savers at 6/7/8%. When the current mortgage deal ends, they should give you a current value for house. You total up what you've saved up and buy into the house then at remortgage. Do it with lawyers where you convert house ownership to tenants in common with deed of trust. When house is sold he gets what equity he built up before remortgage, you get what you put in at remortgage and rest split 50/50.

Much better protection of your money and if you paid it in now you'd likely have a high penalty for early repayment.

He could change the ownership of the house to include you, and it be as tenants in common. If you’re contributing 20% of the value of the property, then you’d own 20% of the house. Going forward, if you pay equally towards the remaining mortgage that’s fair, and if you decide to part ways, either he would have to buy your 20% share or the house would have to be sold. You’d get 20% of the equity at that time - which would likely be more than the original 80k you’re planning to hand over. You should both do a will in that situation to determine who you’d leave your share of the house to.

You don’t have to be ‘on the mortgage’ to have a share in a property.

The mortgage company won't allow someone on the deeds not responsible for paying the mortgage. Thats why she needs to buy in at remortgage on both deeds and mortgage at same time.

I would keep your money separate, OP. The potential for disaster is huge.

buy a share of his property off him to the value of 80k up to him if he pays his mortgage off

wouldn’t of thought pay 1/2 the utilities would increase your share there consumables not investments

You've only been living together a year which isn't that long so it's good that you are being cautious and trying to work out the best way of dealing with this.
I might be tempted to keep things separate until the mortgage is paid off. It's simplest and you will have longer to be sure that you are going to get married.

If you want to get things sorted now you could start by getting a proper valuation of his house. Then I'd go and see a Solicetor who deals with deed of trusts. They will know what to do. You would have to let the mortgage company know though.

Have a think about what you will do if either of you loose your jobs or becomes incapacitated. Or if you have a baby.

It would also be worth thinking about what happens if one of you starts to earn a lot more than the other.

It would also be an idea to think through what you would want to happen if you split up. Would you want him to buy you out etc.

I'd suggest you pay the same % of repairs or improvements than your share of the house. But pay 50% of the running costs. If you buy things like sofas etc I'd suggest one of you buy it and have full ownership in case you split up. So you buy a sofa and the tv but your partner buy the washing machine and the bed. Or whatever.

Thanks for your replies. From the sounds of it I don’t think we can pay off his mortgage or he will lose the fixed rate deal. I’m going to get some legal advice but plenty to think about.

That’s not correct, my stepfather was never on the mortgage but he owned 20% of the house as tenants in common. What that means is that after the mortgage is paid off, he would get 20% of what’s left. A mortgage is a charge against a property so is paid off first in the event of an owners death,

Don’t do it !

For now, I would stick my 80k in the highest interest rate bank account I could find. 5% would give you 4K a year that would help towards living in house (depending how you intend on splitting costs)

In 2 years when his deal is up,
How much is the house worth and how much is owed on the mortgage at that point? You then buy a share of the equity and remortgage with you on the deeds and the mortgage and pay the % of the mortgage you own. If you want to join all money then own the property as joint tenancy and remortgage together and just have all the money and wages in one pot and pay it from that.

it depends on individual circumstances on what works better.

for example, I had a massive deposit for our home but very low income so to get the house we both wanted, I put the large deposit down and my partner pays the massive repayments each month (although everything is in one pot) he just earns 10x more than me

Don't pay for a property you don't own.
Your name doesn't have to be on the mortgage to be (co-)owner of a property. You either use that 80K to buy yourself into the property (which I wouldn't do, it's a stupid investment in case you ever break up), of you don't contribute to the payments at all.

Bills and utilities are different. You're paying for things you're using, like water, heating, electricity, and you'd spend that money wherever you live. It makes sense for you to pay half if you're living there.
It makes zero sense for you to contribute to anything else, property related, that you wouldn't have to pay for if you were renting a home. Like property tax, renovations, repairs, ...
Don't contribute to someone elses wealth when getting nothing in return.
You're better off investing your own 80k elsewhere so at least you're securing your own financial future in case this relationship doesn't last.