Mortgage/relationship advice

LegacyUser

My other half and I have been together for just over 5 years. We are not married or engaged, although that is a step I think will happen soon. In the mean time we are talking and thinking seriously about applying for a mortgage and buying a house together. The time is right career wise, savings wise, and property price wise.

We are in a serious and steady relationship so these kinds of thoughts are not unfounded.

Anyway, I'm looking for some advice.

I have around 50k saved up from over the years which we will use as a deposit. And my OH has little or no savings in comparison. I understand and agree that when people marry, the property/possessions become a shared ownership. But if we take out a joint mortgage now is there any clause or way of me securing a higher percentage of the property ownership? At least until we were married. Just on the off chance, and hopefully extremely unlikely chance that things would go sour. Obviously I wouldn't be considering buying a house if there was even a sniff that things weren't going well. But to be realistic, there is always a chance that things could go sour between now and a wedding, and I would be absolutely kicking myself if I used my life savings to buy a house that would be split between us 50/50 if we broke up.

This may seem like a tight ass thing to do, but it's the most money I've ever had, and probably will ever have in my life. I just want to protect myself. It's also a delicate subject to talk about, although we have discussed it. It's not a trust issue, it's purely a matter of trying to protect what I've worked for so many years to achieve.

Does anyone know some viable options?

Merkin

How feasible is it really do you think that you'll be getting married 'soon' given the fact that he has zero savings and you'll have put 100% of yours into a joint asset? How would you then afford a wedding?

Also, marriage doesn't come with a 100% guarantee. I think if you're really keen on protecting your % investment then you should probably enlist the help of a solicitor.

Typer Monkey

Hi OP. I was in a very similar situation to yourself in 2007 when I bought my house with my ex boyfriend. I had a similar amount of deposit and he had none. The solicitors handling the house purchase drew up a written agreement which detailed that I owned 55% of the house an in event of the house being sold I would retain 55% of the profit. Here's a link to the types of agreements you can have.

http://www.lawyer.ie/property/tenancies

At the time we bought there was the prevailing attitude that property prices could only go up so the contract turned out to be irrelevant when the arse fell out of the property market!

Now as it turns out we did break up a year after buying the house. By that stage the house was in negative equity so there was no profit and we couldn't sell the house because we would've had a 100 grand debt to the bank with no asset to back it up and of course my deposit was long gone at that stage. Luckily I was able to get a new mortgage in my name only and the same solicitors transferred the deeds into my name only. Essentially he was able to walk away from the negative equity and didn't loose any deposit.

It sounds like a raw deal for me I suppose but those were the circumstances at the time. It made sense for me to keep the house as it couldn't be sold and my family and friends were close by. I'm still in it now with my fiancé and our daughter. It's just come out of negative equity but my deposit is a distant memory!

I know contracts are not the most romantic things to be drawing up with your loved one but sometimes the head must rule the heart.

Addle

You could buy the property as 'tenants in common' with you owning a larger share than your boyfriend.
Get legal advice.
Don't feel bad for thinking this way.
It's romantic setting up home together, but you have to be practical sometimes too.

MouseTail

Its not a tight ass thing to do, its an eminently sensible thing to do. Its also quite simple. The tenancy will be registered as a Tenancy in Common rather than Joint Tenancy. Your solicitor will advise.

ABajaninCork

How do you know that marriage is on the cards? Nothing concrete's been decided. I'd be very wary of putting a large sum of money into property and the other party nothing. Trust me on that one - I speak from personal experience. But I was lucky. I bought him out for pennies and my property is not in NE. Your BF should be trying to save. What is he like with money in general? I'd be looking VERY closely at that.

The property market here is not as stable as the UK. I'd be holding on to that money for a while longer. Are you renting together ATM? If not, I'd be looking for somewhere to rent together as a start.

meeeeh

Well your solicitor should be able to help you. Just make sure you get ine who will be representing your intrest. Also I would say you have better chance of retaining your deposit if something goes wrong before marriage than after.

tenifan

€50k is a lot of money, and to save that amount of money you probably have a decent salary. Have you considered buying the house in your own name (with your own mortgage) before you're married? If you're not planning on separating then what does it matter who owns what?

My sister and plenty of my friends bought or built their own houses either before they were in relationships, or when relationships were at an early stage (i.e. before deciding to marry). Now they're living with their other halves and there's no big push to get the properties transferred into joint ownership.

tinkerbell

Why is everyone assuming the OP is a woman? He / she did not say ...

OP, you would be mad to put €50k towards the house and your partner nothing. Why is it a delicate subject to talk about? It's a very sensible subject to talk about! We're talking €50k here. You'd be best waiting until your boyfriend has some money saved and then you get a house that way and you put €10k or €20k towards it if you wish (if he can give €5k or €10k) but you really should not be putting all your savings towards it.

Addle

Even if you own the house yourself, if you live in it together for a few years, married or not, your oh could have entitlements.
Get proper independent legal advice op.

AnonMouse

There is no way you should give up your life savings as a deposit for a house, especially when your other half hasn't any savings to contribute to the deposit. €50k is a lot of cash, and it takes a long time to accumulate, so don't give it up that easy. As others have advised, speak to your solicitor, and your partner - any reasonable partner should see where you are coming from.

As well as that, I'd be looking a bit deeper to be honest, and questioning their ability to pay their part of the mortgage on an ongoing basis, if for some reason, they fall on hard times. That's when savings are required. You don't sound tight at all; you're just being smart.

jon1981

Personally I think both parties should have some skin in the game on these things. Would deferring a year to give him time to generate some savings be a good option?

As mentioned the solicitor can draft a co-ownership agreement which specifies how much each party has put into the house and how the proceeds of a sale are divided should you part ways or whatever. Myself and my partner did this, I don't see why it should be a sore topic with your partner.

Also the above is all moot if the house goes into negative equity and you have to sell, you lose, not him.

Talk to a solicitor.

LegacyUser

jon1981 wrote: »

Personally I think both parties should have some skin in the game on these things. Would deferring a year to give him time to generate some savings be a good option?

As mentioned the solicitor can draft a co-ownership agreement which specifies how much each party has put into the house and how the proceeds of a sale are divided should you part ways or whatever. Myself and my partner did this, I don't see why it should be a sore topic with your partner.

Also the above is all moot if the house goes into negative equity and you have to sell, you lose, not him.

Talk to a solicitor.

Does that hold up if they marry, or even live together though?

I'd be incredibly careful about this OP - if anything goes wrong with the relationship, your life savings are wiped out. Has your partner always earned far less than you, or is there another reason why you are so far apart in terms of savings?

Would you trust your parents & siblings if you bought a property in your parents names, in order to keep it separate from your assets? I'm not sure I'd do that tbh - but I'm also not sure that I'd sink 50k into a property if my partner was contributing nothing, and had a lot to potentially gain from it.

ABajaninCork

I learnt a very hard lesson, OP. Cost me a LOT of money, hassle, stress and heartbreak. NEVER EVER buy property with a boyfriend! With the best will in the world, legal advice, and agreements, if it goes south, it'll be nothing but aggravation.

Wait until the ring's on your finger or go it alone.

meeeeh

And what safety does the ring on the finger offer? Especially for the person who contributed more. I know a few long therm relationships that fell apart a year or two after wedding.

ABajaninCork

meeeeh wrote: »

And what safety does the ring on the finger offer? Especially for the person who contributed more. I know a few long therm relationships that fell apart a year or two after wedding.

A lot more safety than if the ring wasn't there!! Relationships fall apart all the time. Mine did. So what? The OP should be taking any and all steps to protect their financial security. The OP's relationship is supposed to be a partnership. Financially speaking it isn't. No way should s/he be putting in significantly more money than the partner who has no savings.

If they insist on buying a property, I strongly suggest it is bought in their sole name. I'm not sure the partner would be able to get a mortgage anyway since they have apparently have no savings and no evidence of saving which banks are insisting on these days.

meeeeh

ABajaninCork wrote: »

A lot more safety than if the ring wasn't there!! Relationships fall apart all the time. Mine did. So what? The OP should be taking any and all steps to protect their financial security. The OP's relationship is supposed to be a partnership. Financially speaking it isn't. No way should s/he be putting in significantly more money than the partner who has no savings.

If they insist on buying a property, I strongly suggest it is bought in their sole name. I'm not sure the partner would be able to get a mortgage anyway since they have apparently have no savings and no evidence of saving which banks are insisting on these days.

I'm not saying op shouldn't protect herself/himself. I am more entertained by the notion that once you get the ring on your finger everything will fall into place. Getting married is actually putting the person who is bringing larger sum of money into marriage in riskier position. Even cohabitation gives certain rights to other party but considering prenuptial agreements are not recognised by law I would say it's m I re likely that 50k will become 'our money' once you get married.

ABajaninCork

That is why I've been saying the OP should go it alone...

username123

I wouldn't go near buying a property with a partner unless it was either a totally equal share each OR I was resigned to the fact that I'd lose out in the event of break up.

However, there are bigger questions at play here. Why has the partner no savings? Did they assume that the OP would just carry them financially when it came to buying property? If the partner cannot save now, how do they expect to contribute to mortgage repayments and all the costs associated with buying a property?

Tread very softly OP, seek cast iron legal advice. But maybe step back and ask if you will be happy with such an unequal financial situation going forward, does it reflect attitudes to money, or possibly there is something unusual to explain it like a windfall on your side or a very rare cost on your partners. But think long and hard about buying property with someone who cannot make an equal contribution. I've seen too many people stung and stung badly.

meeeeh

Three of my cousins had their own houses mortgage free before they were in serious relationship or had children. If they would look purely through financial perspective neither would end up with partner they have now or have kids. They seem happy.

While I agree some kind of legal protection is needed, the actual situation can be a lot more complicated.

Dixie Chick

I would wait a few years until 1) you partner has the savings and 2) ye are married. Another failed relationship and negative equity person here but at least we were 50/50 all the way!

If you cant have these chats with the partner, then I don think ye have any reason to be buying a house together yet

Neyite

You need legal advice, which you wont get here. Even if you didnt marry, your partner, upon becoming your ex, may be entitled to a share of your assets if you have cohabited for 5 years (3 I think if you have a child together) I'm not sure if that applies to savings but I would be concerned it might.

And do check that any agreement you do get is binding in law in the event you marry and have children. Whatever about two adults walking away with their own assets in a divorce, children change that and must be provided for, so if a judge felt that you cashing in on your share of a house affected your children adversely, they may overrule the agreement.

Its a lot of ifs and buts and conjecture, so seek legal advice.

tenifan

another point.. €50k is a huge deposit. Are you spending half a million on a house?
Interest rates are fairly high (relative to deposit rates) and could go a lot higher. Still, wouldn't it be more arms length and fair if you both contribute €12.5k each as a deposit and you leave the other €37.5k in your savings account?

LegacyUser

This scenario doesn't sit right at all. Your partner has been in a relationship with you for 5 years. If he/she saw the relationship having a real comitted future (marriage, kids) surely they would at some point have made some attempt at saving for that future over the last 5 years?

As another poster said how on earth is he/she going to manage to help pay back a mortgage when they can't even manage to save at the moment?! Where's the money for the wedding going to come from? The future kids college funds? I'd be very very cautious of anyone who seems incapable of saving, it's a flashing neon warning sign IMHO.

If you're female OP wait until he proposes at the very least. I'd want to be damn sure that he showed some real tangible commitment to you and the relationship before you commit such a massive sum of unrefundable money to him.

If you're male, I'd be waiting until she'd saved enough to contribute 15K at the very very least.

As it stands OP it sounds like a recipe for disaster.

The_Conductor

tenifan wrote: »

another point.. €50k is a huge deposit. Are you spending half a million on a house?
Interest rates are fairly high (relative to deposit rates) and could go a lot higher. Still, wouldn't it be more arms length and fair if you both contribute €12.5k each as a deposit and you leave the other €37.5k in your savings account?

50k is not a huge deposit- banks look at repayment capacity (typically 35% of NET income), and while you need to have a deposit- it is most certainly not the deciding factor in determining how much you can, or indeed should, borrow.

Interest rates, despite their current levels- are not at what is considered 'normal' levels, and variable rates could indeed increase- the current negative ECB overnight rate, notwithstanding. You need to factor possible increases into your equation.

Vis- the 50k lumpsum you've saved up- are you in a position to buy of your own accord- and perhaps draw up a rent-a-room agreement type arrangement with your other half- until such time as you get married or make a longer term commitment to one another? Its damn messy if a relationship breaks up and property is involved- if you were in a position to finance it independently- it may be a better course of action?

LegacyUser

I would agree with all of the posts here. You need to get legal advice.
You have told us that career wise, savings wise and property price wise it is time for you to be buying a house.

The reality is that you have been with someone for the past 5 years and they have no money saved after this period of time. I am going to be honest here I think they are taking you for a mug. You will come along and use your life savings for a house for you both but you are not even engaged or married as yet.
How does your oh expect to pay the mortgage if you get one if they have not saved a cent in the past 5 years? Who will pay the mortgage, for the wedding you hope to have ect in the future?
The bank will ask to see prof of savings and they will ask your oh why have they no savings.

This would be a warning to me - why have they no savings? Are or where they in a lot of debit in the past ( they could have a bad credit rating)?
Have they a gambling problem that you don't know about?

At this stage I would be in no rush to buy a house with your oh. You may think that buying a house together will move your relationship along but you could end up with nothing. Your oh may be keen to buy a house but the reality is until they have there own savings they can't afford this.

I would say to your oh if you are serious about our future you need to start saving x amount of money each month into a high interest regular savings account.
I would then say that you want to see a copy of there credit history along with there bank statements.
You need to find out have they a bad credit rating or are have they an internet gambling account/accounts. Both of these could stop you from getting a mortgage.

I know several woman who lost a lot of money rushing in to buying a house/apartment with there boyfriends. The relationships end and next thing he is entitled to a share of the house despite the fact he put no or very little money into the house on day one.

I would not buy a house with your oh until they have at least €15k in savings and you have seen there bank statements and credit history. I know this sounds harsh but you need to remember what you did without over a number of years to save €50k when your oh has not saved a cent in 5 years.

selfbuildkk

Hi OP I was in the very same situation as yourself, I was buying a house with my partner, I put down pretty much half the cost of the house as deposit and we were left with a mortgage which my OH pays. What you need is called a "deed of trust" which you need to speak to your solicitor about. Hope this helps.

Neyite

Op you may find further information on the Accomodation & Property Forum

They dont allow anon posting though.