Moving in together - help!

JoA_3

I am moving down to live with my partner of 3 years, I currently live in rented accommodation. My partner owns the house I will be moving into with her with an interest only mortgage on a fixed rate that runs out in 12 months. The idea is that I will match her equity in the house and we will take on a joint mortgage. However, as the fixed rate does not run out for 12 months, we will be penalised financially for remortgaging at this stage and so we are looking for alternative solutions.

My partner has suggested that I pay rent to her for the next 12 months until we can remortgage as indicated above. This will also give us some "bedding in time" as we have never lived together before. Her argument is that by paying interest only, she is essentially just paying rent on the house. This is of course not quite the same, as she will have the benefit of any increase in equity of the house over that 12 months, whereas my rent payments will be essentially dead money.
I also think that I will lose out twice, paying rent for the next 12 months and then having to pay more to match her increased equity at the end of the 12 months. We are also planning a number of improvements, which will require investment from both of us. I am going to suggest some sort of legal agreement whereby I pay rent but am entitled to a share of the equity increase (if any) over the next 12 months before I invest fully. Does this sound sensible? Any tips for such an agreement, I assume we would have to get a valuation now and at the end of the 12 month period?

Any advice gratefully received.

saveallmymoney

Would this agreement also require you to fund half of any decrease in the value of the house?

kazwookie

House prices are falling at the moment!

Lotus-eater

JoA wrote: »

Any advice gratefully received.

Never move in with anyone, unless you have checked out the size of their (ahem) fun draw...

To be serious, if you get a valuation now and again in 12 months, the probability is that is will have gone down in that time. So pay half the interest only mortgage till then, then half the equity in 12 months!
In a rising market you would be losing, in a slowing market, only your GF loses.

Can't you just see the love :happyhear

Debt_Free_Chick

JoA wrote: »

My partner has suggested that I pay rent to her for the next 12 months until we can remortgage as indicated above. This will also give us some "bedding in time" as we have never lived together before. Her argument is that by paying interest only, she is essentially just paying rent on the house. This is of course not quite the same, as she will have the benefit of any increase in equity of the house over that 12 months,

I can see what you mean but, arguably, she is the only one who has contributed to any equity, presumaby in the past and/or via the deposit.

whereas my rent payments will be essentially dead money.

no more and no less than the interest-only payments being made. That's effectively "dead money" too .... but it allows you both to occupy the house as "owners" rather than tenants.

I also think that I will lose out twice, paying rent for the next 12 months and then having to pay more to match her increased equity at the end of the 12 months. We are also planning a number of improvements, which will require investment from both of us. I am going to suggest some sort of legal agreement whereby I pay rent but am entitled to a share of the equity increase (if any) over the next 12 months before I invest fully. Does this sound sensible? Any tips for such an agreement, I assume we would have to get a valuation now and at the end of the 12 month period?

Any advice gratefully received.

Is it really worth it for only 12 months when there's unlikely to be any substantial increase in the equity?

You men can take a potentially romantic situation and make it sound as wonderful as the negotation of the Geneva Convention :rotfl: :rotfl: :rotfl:

Of course, you're right to have the legalities sorted out but either remortgage now and take whatever "hit" that involves, or simply pay her rent (plus a share of the bills?) for 12 months and remortgage then.

PasturesNew

She's got a catch in you hasn't she. Have you ever said "I love you"? (P.S. it doesn't count if you want a favour or a sh4g).

House prices are most likely going to be cheaper in a year, no matter where you live. You will most likely benefit. You win.

It's only 12 months, if you didn't move in with her you'd be "wasting" more money on rent and running your current household. You win again.

She's spent more so far gaining her equity, she's insured the house, maintained it and turned it into a home. You win yet again.

What does she get out of this? A gold-digger with no fluffy love.... pfft. I'd rather live alone.

Lotus-eater

PasturesNew wrote: »

Have you ever said "I love you"? (P.S. it doesn't count if you want a favour or a sh4g).

Are you serious? I've been saving up my "I love you's" for just that sort of occasion. (If you let them have too many, it doesn't become so realistic)

ps I was serious about the fun draw.

amcluesent

Yep, as soon as you say 'I love you' for no reason, her indoors gets suspicious. Best not to mention anything unless your looking for something in return!

JoA_3

Whoa, ok keep your hats on, just being a cautious lawyer here, no under hand tactics intended! Oh and I'm a girl not a rampant male if that makes any difference and I am giving up everything to move to a new city so it's not all one sided.
Thanks for the few helpful comments though!

Lotus-eater

JoA wrote: »

Whoa, ok keep your hats on, just being a cautious lawyer here, no under hand tactics intended! Oh and I'm a girl not a rampant male if that makes any difference and I am giving up everything to move to a new city so it's not all one sided.
Thanks for the few helpful comments though!

There is so many questions I want to ask

I suspect you know all about "fun draws" already then

Must........ stop........ typing.........:rotfl:

PasturesNew

Lotus-eater wrote: »

There is so many questions I want to ask

I suspect you know all about "fun draws" already then

Must........ stop........ typing.........:rotfl:

I don't .... keeeep tyyyppping....