How best to deal with a joint house purchase when one of you is renting?

jezza574

I'm in a bit of a quandary and it's been a long time since I've been in the house buying game so wonder if anyone can pass on their experiences?

I'm currently renting and approaching the end of my most recent contract (end Aug) but need to decide now if I'm going to renew as there is a 2 month notice period, if I do then I'm committing to another 6 months which takes me through to the end of Feb 2012.

The dilemma is that my partner, who owns her own property, put it on the market about a month ago and has unexpectedly received an offer (we thought it would take a while to shift!) therefore we are thinking about the next step of moving in together.

So I guess the crux of my problem is...

Can I become part of her new mortgage application while I have a rental commitment? Also, bearing in mind that there may be overlap in terms of the completion of any house purchase and the end of my rental, I can't afford to pay both a rent and part of a mortgage payment so am concerned that the timings of when things occur could leave a situation of several months where she has a larger mortgage payment that I can't financially contribute to until my contract has finished.

I'm seeing a situation unfolding where any future joint house purchase can't be completed before the end of my rental period but that the end of the next one seems a very long time away. Making the decision as to whether to renew seem a very tricky one! Her current property is only a very small 1 bedroom flat so the practicalities of me temporarily moving in are difficult.

Any advice welcomed

hazyjo

Bit confused as to whether it's going to be a joint mortgage or not.

Is she selling so you can move in together, or was she selling anyway to buy somewhere bigger?

All seems a bit vague - you said she'd received an offer, therefore you were thinking about moving in together. Were you not thinking of it before which is why it was on the market? Has this decision just been made?

Maybe some clarification before anyone can offer opinions... not worth anyone babbling on about 'what ifs' if they're not going to be relevant.

Ta.

Jx

jezza574

Sorry for confusion and babbling :embarasse

Yes, she was moving anyway for somewhere bigger and had been intending to do so before we met (about 18 months ago)

Just before she put the property on the market again we discussed what would be best and agreed that we wanted to move in together but were confused about the practicalities as I was in a rental situation and without additional savings to add to the monies she had already invested in the current property.

Basically without my input into a potential joint mortgage she can still afford to move on her own but my input (at least salary wise) would improve the potential options.

Essentially I'm worried about getting into a situation where I commit to another rental contract that will last until the end of Feb next year but a potential joint house purchase goes through much earlier than that. Trying to avoid a situation where she has to contend with a mortgage payment based on our joint income when I can't contribute to it until I'm out of the rental situation.

Probably still too many if's and but's there but that's what happens when you're a natural worrier! My guess is that the only real option is to hand in my notice now (2 months) and lodge somewhere while throwing stuff into storage?

kingstreet

If you renew, could she move in with you after hers sells, with both of you moving into a joint property you purchase to coincide with the end of your renewed tenancy in Feb 2012?

hazyjo

Not you babbling - me lol! Not worth me (or anyone) speculating without knowing the actual situation.

I'd suggest that she continues to buy alone and you don't contribute towards the mortgage. Maybe work out a fair amount to pay towards expenses, food, etc, but leave the mortgage to her.

You'll probably be better off than you currently are so you can save the difference. If you split up, you'll have some money for a deposit to rent or buy, and she should be able to manage in your absence. If you stay together, you'll probably want to move again in a few years, or maybe you could pay a chunk of the mortgage off with your savings and make it a joint financial commitment.

Your salary shouldn't come into it with her purchase.

The average purchase is around 12 weeks - obviously some will be 8, some will be 16, give or take. I'd base it on 12 though.

You can stay in your rental until she's bought, or move in with her now (people manage in one bed flats with kids, I'm sure you could do it for a month or two), or move in with her in the new pad after you've given notice on your rental and reached the end of your contract.

Or couldn't you just stay put and not renew the tenancy? Doesn't that just go onto a rolling contract? Sorry, not familiar with rentals at all, but from what I've read on here, I'm sure you can just stay put and the contract continues on a rolling basis - with one or two month's notice (sorry, I forget).

You don't need to move in with her on the day she moves in. I'd definitely keep it all in her name for now.

Have you been together long?

Jx

scottishblondie

Perhaps it would be best for her to proceed alone, and then you can move in with her when you are ready. It can get messy dividing up a joint asset if you split up, especially if you don't contribute equally in the first place.

Obviously no-one goes into this situation thinking that they will split up, but if you haven't already lived together, you've only been together for 18 months etc, then you can't guarantee that it will all work out. And if it all goes wrong your partner could be left with a mortgage that she can't afford by herself.

Another option could be for you both to rent together in the meantime, while looking for a property. If in England/Wales a tenancy automatically becomes periodic after the fixed term, allowing you to give a months notice to move out. In Scotland you can negotiate with you LL to go onto a month-by-month tenancy after the fixed term.

cord123

why dont you not renew your contract and just move into the house that she is currently selling..... that way you will have no commitments at all or a contract to get out of.... plus the money you will be saving you can put in a joint pot for stuff for the new house....

jezza574

Thanks for all the tips guys!

The last time I had a mortgage (about 12 years ago) was with a different partner and ended badly in terms of getting out of it so I am wary, to a degree, of jumping into a joint one 18 months into this relationship.

Her moving in with me until the end of my next potential contract (Feb 2012) while we look together is certainly an option but I guess I was concerned at any implications this might have at her end in terms of coming off the property ladder, albeit hopefully temporarily.

And yes, the other way round it is to live at hers in the interim but I guess I'm just trying to avoid the whole living out of boxes or a storage facility but that's a bit selfish perhaps as others will have experienced far more inconvenience!

Am going to check out the situation with my letting agent at lunchtime but the impression I'd got was that it was 6 or 12 month contracts only, with them anyway.

pinkshoes

Why do you have to renew your tenancy? Why can't it just move onto a rolling contract where you only have to give 1 months notice? That way, there will never be too much of an over-lap should you want to buy together.

jezza574

So am I right in understanding that any letting agent should/is obliged to let me go on to a rolling contract should I so wish?

pinkshoes

jezza574 wrote: »

So am I right in understanding that any letting agent should/is obliged to let me go on to a rolling contract should I so wish?

They're not obliged to, they just like making you sign fixed contracts as they get more fees!

If you don't renew, then it automatically goes onto a rolling contract the day after your fixed period ends, so perhaps just stall them.

(they still have to give you 2 months notice from a rent date in a rolling contract, and you just have to give 1)