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Mortgage advice...

Discussion in 'Personal' started by chloejewel, Apr 22, 2012.

  1. chloejewel

    chloejewel New commenter

    Hello everyone. I'm looking for some advice about procedures, legal stuff and paperwork regarding getting a joint mortgage. I'm a complete novice at all of this, so please excuse my clumsy explanations below!
    My boyfriend and I are going to buy a house together. He currently has a mortgage and once his place is sold and the mortgage paid off, he will have about £100,000 left to invest in the new place. I'm currently renting and only have about £3000 in savings, so won't be able to contribute much in way of deposit on the new place. He is working freelance and has an irregular income, which can make paying the mortgage by himself a struggle some months. I'm on UPS1, in a full-time, secure post, so have the stable income he lacks. Buying a place together is ideal for both of us.
    Would it work out best if we use all the profit from the sale of his current place as a deposit? We've been together for nearly 8 years now but if we were to break up, how would the sharing of assets work? Is there an agreement we should sign that protects his £100,000 investment? Would an IFA be the best person to talk to or should we deal directly with his current mortgage provider?
    Thank you for any hints or tips- I'm an excited but confused Jewel at the moment!
     
  2. chloejewel

    chloejewel New commenter

    Hello everyone. I'm looking for some advice about procedures, legal stuff and paperwork regarding getting a joint mortgage. I'm a complete novice at all of this, so please excuse my clumsy explanations below!
    My boyfriend and I are going to buy a house together. He currently has a mortgage and once his place is sold and the mortgage paid off, he will have about £100,000 left to invest in the new place. I'm currently renting and only have about £3000 in savings, so won't be able to contribute much in way of deposit on the new place. He is working freelance and has an irregular income, which can make paying the mortgage by himself a struggle some months. I'm on UPS1, in a full-time, secure post, so have the stable income he lacks. Buying a place together is ideal for both of us.
    Would it work out best if we use all the profit from the sale of his current place as a deposit? We've been together for nearly 8 years now but if we were to break up, how would the sharing of assets work? Is there an agreement we should sign that protects his £100,000 investment? Would an IFA be the best person to talk to or should we deal directly with his current mortgage provider?
    Thank you for any hints or tips- I'm an excited but confused Jewel at the moment!
     
  3. A joint mortgage will make you both equally responsible for the debt. I'd see a solicitor about how you go about ensuring your assets and debts are shared fairly if you split up. Why do you think you'll split up? I'd not a buy a shared home with a partner unless I intended the relationship to work!
     
  4. chloejewel

    chloejewel New commenter

    LOL! I didn't mean for it to come across as me thinking we will split up, I was just trying to plan for all eventualities. I definitely don't want to split up with him!
     
  5. Then I wouldn't stress about it. If you really want to sort it out it is legal advice you need rather than mortgage advice.
     
  6. When we bought before we were married we asked and the solicitor wrote something up for us. Ask your solicitor for his advic. He will have seen it/heard it all before so will be able to give you some advice/examples and sort you out quickly!
     
  7. bombaysapphire

    bombaysapphire Star commenter

    A solicitor can produce a Trust Deed which sets out who owns what if you split up and need to sell the place and share the proceeds.
    Using the full £100,000 as a deposit will give a better return than any cash investment.
     
  8. chloejewel

    chloejewel New commenter

    Thank you both. I think I'm much more stressed about the money than he is- without his profit for a deposit, I wouldn't be in a position to buy for a good few years yet so I'm very grateful!
     
  9. You will probably need to own it as tenants in common rather than as joint tenants in order to protect his higher initial investment. A solicitor will be very used to this, it is not at all uncommon.Good luck. Do shop around for mortgages to make sure you get the best possible deal. Don't automatically go with his current provider.
     
  10. BelleDuJour

    BelleDuJour Star commenter

    Also make sure you keep records of who pays the mortgage each month. If you ever do split up, and you've paid the lion's share of the mortgage repayments, it will put you in better stead when assets get split up.
    I know it's a horrid thing to think about but you are sensible to do so.
     
  11. Crowbob

    Crowbob Established commenter

    but this has (serious) implications if either party dies intestate....
     
  12. catmother

    catmother Star commenter

    Surely it would be wise for OP and partner to make a will as soon as they buy the house together?
     
  13. Crowbob

    Crowbob Established commenter

    I agree. However, the many people who die intestate suggests that what is wise is not necessarily what is always done.
    Also, if the OP subsequently marries, owning as TIC may cause IHT issues that are not present for joint tenants. They are talking of a 100,000 deposit, so it could become relevant...
     
  14. chloejewel

    chloejewel New commenter

    Marriage is a possibility, though not a priority for us.
    IHT??
    What problems would getting married cause if we buy as TIC?
    Thank you all for the comments- very interesting and useful!
     
  15. So he can't get a mortgage due to itinerant working conditions but has a wedge, and you have nothing but a secure job.
    So they may lend you, what, 2 times your salary in current conditions - so maybe 40- 50K depending. Maybe a bit more if he puts all the money in as security.
    And you won't be married.
    If I were him I'd just stay put. Sorry.
    Seriously, I would go out there and see what they will lend you in the present set up and the present climate, and with the legally non-binding relationship as it may not be as much as you thought, or at the rates you consider reasonable.
    The other half works in the banks, and I would not say you sound like a very mortgagable scenario really, and the terms and conditions are much harsher than they were 5 years ago... but who am I to say, Mr Merlin?

     
  16. chloejewel

    chloejewel New commenter

    I didn't say he can't get a mortgage.
    Thanks for your input anyway.
     

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