unmarried couple, two principal residences?

nuki

Hi everyone, hopefully someone can shed some light into our situation. I would really like to get an idea if this is even possible before we go and speak with lenders and solicitors.

Me and my (unmarried) partner are currently living together but have decided to separate, as our relationship is not working anymore. We have a child together who will live with me, while he will continue to support her.

We both have good savings in our accounts and would like to buy a flat each. The problem is, my income is not that high so I can't get the mortgage I want even though I can afford it, with the aid of child maintenance. But.. the lender won't take into account child maintenance unless it's court enforced (and we don't want to go to court).

So our idea was this: buy the two flats jointly and live separately. I have about 50K in savings which would allow me to buy a flat with 85% LTV. My partner has about 40K savings which would allow him to buy a 1-br flat with about 85% LTV.

I would live in the 2-br flat with the child, he would live in the 1-br flat by himself. The 2-br would be declared as my main residence, the 1-br flat would be declared as his main residence. Mortgages would be joint on both flats. Ownership would be tenants in common on both flats, with me owning 90% on the 2-br flat, and him owning 90% of the 1-br flat. I would make all the payments on the 2-br flat (downpayment, mortgage, bills, everything etc) he would cover entirely the payments for the 1-br, so finances will be completely separate.

Is this a realistic scenario? And, would the lender treat the 2nd property as a second/buy-to-let home (because in this case one of us would have to come up with 25% downpayment for his property, which none of us has - we both have about 15% downpayment). We are hoping - because we are unmarried, we can have each a principal residence so that we escape the 75%LTV rule for BTL/second properties.

Hope this all makes sense and someone can give us some ideas.

Many thanks.

Thrugelmir

BTL is not an option for you. Joint mortgages are not possible either.

Suggest you simplify your plans to a basic level.

nuki

Thrugelmir wrote: »

BTL is not an option for you. Joint mortgages are not possible either.

Suggest you simplify your plans to a basic level.

Sorry but can you clarify why can't we get joint mortgages, assuming we can afford them? (and we definitely don't want BTL). Is there anything that prevents us from owning two properties in common?

ermine

Think about what you are saying. Look at the proposition from the lender's point of view

assuming we can afford them?

and

currently living together but have decided to separate, as our relationship is not working anymore.

so as a lender, how lucky would you feel about lending money to two people who don't get on anymore, but want to be considered as one entity, and then to cap it all, want to buy TWO houses instead of the normal one?

It's just so off-the-wall, madcap risky the lender would need their head examined if they didn't run for the hills right away.

The only way you could make this work is to pretend to be a happy couple, and buy one flat and a BTL property. Committing fraud in the process, which won't do you any favours when the inevitable happens and one of you meets somebody else and needs to raise money for a house the size they can live in as a couple.

It's so wrong, on so many fronts. You both need to live within your means. You could afford one house as a couple. You can't afford two houses as two singles, and be a satisfactory lending risk. Renting in probably your case would seem the logical option.

nuki

ermine wrote: »

so as a lender, how lucky would you feel about lending money to two people who don't get on anymore, but want to be considered as one entity, and then to cap it all, want to buy TWO houses instead of the normal one?
.

We don't want to be considered an entity.

We would buy two properties jointly, assume joint responsibility for two mortgages, and we would both be on both titles as tenants in common (with 90-10 shares on each property so that we can do the buy out down the road).

We would live separately (we are currently an unmarried couple but will stay just friends). I read somewhere that unmarried couples (or it can be friends who own property in common, right?) are allowed to have two principal residences as far as HMRC is concerned, but what I am not sure about is how the lender would treat this, as 2nd residence or two main residences?

Not trying to commit any fraud in any way, so we're not interested in the BTL option (none of us has 25% downpayment for the BTL anyway).

I'm not trying to debate here, just trying to find out about the 'two main residences' and how lenders would view this.

Thanks.

ps. As a total amount, we would take much less mortgage that we could afford on a combined income. So "we" can afford it.

CLAPTON

'two main residences' is all about tax (cgt) and nothing to do with lenders.

no lender will provide two residential mortgages.

Thrugelmir

nuki wrote: »

Sorry but can you clarify why can't we get joint mortgages, assuming we can afford them? (and we definitely don't want BTL). Is there anything that prevents us from owning two properties in common?

In one word. Affordability. What you are suggesting is in effect guaranteeing each others mortgages. A non-starter as an idea.

nuki

I'm still not convinced re: obtaining two residential mortgages as long as we financially qualify (i.e. meet the lending criteria with the two incomes) but anyway... we made an appointment with the lender tomorrow so we'll know if it this is doable.

Thanks for the answers so far!

getmore4less

So our idea was this: buy the two flats jointly and live separately. I have about 50K in savings which would allow me to buy a flat with 85% LTV. My partner has about 40K savings which would allow him to buy a 1-br flat with about 85% LTV

Total borrowing £600k, needs joint salaries around £120k-£150K or even more

getmore4less

CLAPTON wrote: »

'two main residences' is all about tax (cgt) and nothing to do with lenders.

no lender will provide two residential mortgages.

Plenty of people have morethan one property with residential(second home)mortgages.

getmore4less

if you really can afford this then one realistic option seems to be you buy the place on your own and the OH gives you enough of his deopsit to make that happen.

He then saves up till he can afford a place, you paying him back what you owe him.

with your senario you both become liable for the full borrowings so are both entertaining much higher risk.

the TIC % are a bit of a red herring when you actual only have 15% equity any buyout needs the mortgage sorting.