Looking to buy property with Partner - advice needed!

mcdonger

Hi there,

I'm a newcomer to the website, although have read many an article in recent months and I figured this would be a good place to ask for advise with regards to a joint mortgage with my partner.

Me and my partner have not been together long enough to consider living together at this moment in time. However, the tenancy on my partner's property is coming to an end and she is now in the process of looking for a new place to rent out.

I have suggested to her that instead of looking to rent another property (which equates to approximately £700/month), it would make more financial sense to actually buy a property as we are both able to get a very preferential rate on a mortgage with our employer (we both work for the same company and mortgage payments would be around £300-£400/month).

Now seeing as we are not yet considering living together, is it feasible for us to apply for a joint mortgage together on a property and have both of our names on the deed, with only my partner living in the premises?

I am aware that I would be left liable for any unpaid mortgage payments/bills although I am not too concerned about this at this time. We would look to get financial support from my partner's parents towards the deposit, and potentially draw up some form of legal agreement between us so that I am not left high and dry should we split up and my partner default on the payments.

So in summary:

Me & my partner would look to buy a house via a joint mortgage, although only my partner would live in the premises at this time - is this a good idea/feasible?

What drawbacks would there be to this proposal? Would we have to draw up any legal documents such as a will?

I feel that this proposal makes very good financial sense given the highly preferential rate that we could obtain from our employer, but any advice on potential pitfalls is greatly appreciated.

Oh and we are both first time buyers if this would have any impact upon things.

Many thanks in advance.

cord123

How are you proposing to split the mortgage payments?

CLAPTON

what are the financial facts?
property price
salaries
deposit
mortgage

and most important: what are your 'exit' strategies i.e. if one of you wanted to sell their share or found another partner or left the company with this great mortgage deal etc etc

mcdonger

Thanks for the replies.

My partner would be solely making the mortgage repayments until we are ready to live together, ideally 3-6 months down the line. The rate that we are able to obtain from our employer (0.5%) is fixed from when we obtain it, even if we leave the company further down the line.

At this particular moment in time, we have not looked at any specific properties that we are looking to buy but an approximate price that we are willing to stretch to will be around £160k - at present we have a joint income of around £37k. Our joint incomes would allow us to receive a mortgage of up to around £140k-£150k.

I hope this information helps, both of us are relatively unexperienced in this area and have spoken only briefly to a mortgage adviser to enquire around the rates we are able to obtain. If you require any further details, please don't hesitate to ask.

BitterAndTwisted

You haven't been together long enough to have considered living together but you're thinking about acquiring a joint financial commitment for possibly the next 25 years, which is a lot longer than some marriages last?

I'm sorry to be cynical but this has "pain and suffering" written all over it.

mcdonger

I do certainly see your point of view that there are definate drawbacks and risks to this, although I perhaps should have stated that our families have been friends for some time. That said, I don't really see how this is any different to a co-buying scheme between an individual met through a website for that specific purpose - I haven't read through these in detail, but from what I understand I can't see how they differ between 2 relative strangers doing so, and 2 people that know each other and have been in a relationship for the past 9-10 months (we have known each other prior to this, although not closely). You point out about the joint financial commitment for the next 25 years, but from what I understand there are various legal agreements that we could draw up (as with co-buying schemes) in the event of any disagreement or falling out between us.

I don't pretend to be knowledgable about any of this - that's why I'm here to ask and learn. This is just an idea that we're throwing around and looking at purchasing a property would appear to make financial sense as opposed to renting which is just more expensive and apparent wasted money, ultimately.

All input is greatly appreciated, negative or positive, and I thank you for your replies and any further advice that you are able to offer.

wannabehermit

My biggest piece of advice is make sure it is very clear who is putting what into it. e.g. if you are putting 80% of the deposit in, make very very sure that this is written in by the solicitor, same with the mortgage payments - if one of you is paying more than the other, this must be reflected in the documents for if and when the time comes to sell.

I was offered sole interest in the deposit on my house but was too scared of my ex to say yes even though that's what I wanted, 2 years after the house was bought I had to split the equity 50/50 with him, even though 100% was mine and I or my parents had made most of the mortgage payments. I know you don't plan on splitting up. Nobody does, but it is in both your interests to protect what each of you put into it.

BitterAndTwisted

Unfortunately the longer you hang out on this part of the forum the more threads you read about arrangements like this ending in grief and misery and this had most likely coloured my attitude.

You must list every single one of all the possible outcomes, come to a mutual agreement about how they will be resolved fairly between you, especially with regard to how an unequal deposit, contribution towards maintenance and improvements and/or mortgage-payments would be treated and then put into place something legally-binding.

Being shackled to someone else in this way is a much greater risk and responsibility than being married to each other.

Errata

Have a google and see what the average length of cohabitation in the UK is.

BitterAndTwisted

Two years apparently. I was surprised it was that long. Not enough time to build up decent equity. Could turn out to be as expensive as renting with a much longer, drawn-out separation process.

jjlandlord

mcdonger wrote: »

Me and my partner have not been together long enough to consider living together at this moment in time.

So, logically, you decide to buy a property together... Which, even if you won't live together, is a more serious, long term, commitment with more potential for disaster.