To buy or not to buy as a newly together, unmarried couple

ivanap

Hi there,


My partner and I are both in our early 30s and have been together for a few months, but both feel we have a happy future ahead of us which entails eventual marriage and children.


I currently live with my dad where I pay a modest rent and he rents a place on his own for which he pays two or even three times more than I currently.



Buying on his own

My partner would like to buy on his own asap (he’s been thinking about this for a while and before he met me) as he doesn’t want to pay any more rent and have nothing to show for it. He would then like me to live with him, where he'd be responsible for the mortgage and I would pay towards bills, holidays, etc. and also save for a bigger place.



I see this arrangement as me effectively being his tenant and would much rather we buy together. He’s not as keen (what if we split up, etc.) and whilst I understand it’s early days in our relationship, if we are planning on being together, I don’t see a problem with pooling our resources as opposed to him doing it on his own. He feels that if he buys asap, he could then sell the property in two or three years time and we could use that money towards our future home together.



His current financial standing

He has small savings to put towards the mortgage, the rest of the deposit would come from his dad as a loan. He will therefore be paying the mortgage, plus his existing debt (bank loan), plus his dad back and I really think his monthly outgoings will be pretty crippling. We may then choose to get married and we’ll also need to save for that.


Buy in a year or so together

My proposal would be to rent together for a year or so whilst saving for a deposit (which would therefore mean not borrowing from his dad) and then buying a property which could probably be a little nicer and bigger than if he bought on this own (I appreciate that buying and selling property is expensive, so I think we would also be saving this way by buying once in a 5 year period, as opposed to twice in the same time period).


Savings for the deposit

I currently also have very modest savings, but in a year or so, I could save up to £7 or £8k and I think he could potentially save up to £9 to £10k. To ensure we both don’t lose out if we were to split, then of course we can drawn up a law abiding agreement prior to getting the mortgage.



Credit score and income
We both have pretty good credit scores. We both earn a good wage and have good, steady jobs


Aspirations

Finally, we both aspire to a certain standard of living and we both like to travel and have fun and I feel that this will have to go on the back burner if he buys on his own (he has a couple of expensive hobbies). However, if we club together and save up for a deposit, I feel we’ll still be able to have fun and spend money on travel, hobbies, etc. and enjoy the somewhat carefree existence before the mortgage, wedding and babies come into the equation.


As I write this, it’s helped clear my thoughts a little and it’s also highlighting to me that a few of the “stumbling” blocks we are encountering are primarily to do with timing, trust, expectations and communication and also very importantly his desire to have his own property and independence, as well as my desire to be an equal partner and be given the opportunity to contribute towards our future.


Exciting, yet potentially a little complicated and troublesome times if not thought through properly.


Thank you much for reading this post. Any thoughts and suggestion would be most welcome. Thank you in advance.

Mojisola

This is worth reading through - https://www.advicenow.org.uk/living-together/

It might raise some other issues.

Yorkie1

Your partner's plan to buy on his own, using a loaned deposit, may be a non-starter in any event. The fact of the loan would have to be declared to the mortgage lender (or else fraud), and would impact on the lender's affordability assessment.

I also think that planning to sell a property in only 2-3 years' time does not make a lot of financial sense. Unless property prices are rising steadily in your area, it is quite likely that a loss will be made once stamp duty, mortgage application fees, solicitors fees, surveyor / valuation costs, moving costs etc are taken into account.

Strapped

Don't do it.

G_M

If the relationship is not secure enough, or you are not commited enough, for marriage, then it is certainly not secure/ commited enough for joint property ownership.

Divorce is easy by comparison....

R_P_W

G_M wrote: »

If the relationship is not secure enough, or you are not commited enough, for marriage, then it is certainly not secure/ commited enough for joint property ownership.

Divorce is easy by comparison....

What does marriage have to do with it?

I know plenty of people who are not married who have joint property ownership.

Whether doing it after being together for a few months and having not lived together before is a good idea should be the question.

PasturesNew

I'd go with his plan and let him buy somewhere - and if it all fell apart, then move out as good as gold without a gripe. If you're still together in 30 years' time then it won't matter what choice you made today .... but if you've fallen out after 2 years together than hooking up this early could cause future problems.

Fire_Fox

ivanap wrote: »

I see this arrangement as me effectively being his tenant and would much rather we buy together. He’s not as keen (what if we split up, etc.) and whilst I understand it’s early days in our relationship, if we are planning on being together, I don’t see a problem with pooling our resources as opposed to him doing it on his own. He feels that if he buys asap, he could then sell the property in two or three years time and we could use that money towards our future home together.



His current financial standing

He has small savings to put towards the mortgage, the rest of the deposit would come from his dad as a loan. He will therefore be paying the mortgage, plus his existing debt (bank loan), plus his dad back and I really think his monthly outgoings will be pretty crippling. We may then choose to get married and we’ll also need to save for that.


Buy in a year or so together

My proposal would be to rent together for a year or so whilst saving for a deposit (which would therefore mean not borrowing from his dad) and then buying a property which could probably be a little nicer and bigger than if he bought on this own (I appreciate that buying and selling property is expensive, so I think we would also be saving this way by buying once in a 5 year period, as opposed to twice in the same time period).


Savings for the deposit

I currently also have very modest savings, but in a year or so, I could save up to £7 or £8k and I think he could potentially save up to £9 to £10k. To ensure we both don’t lose out if we were to split, then of course we can drawn up a law abiding agreement prior to getting the mortgage.

Aspirations

Finally, we both aspire to a certain standard of living and we both like to travel and have fun and I feel that this will have to go on the back burner if he buys on his own (he has a couple of expensive hobbies). However, if we club together and save up for a deposit, I feel we’ll still be able to have fun and spend money on travel, hobbies, etc. and enjoy the somewhat carefree existence before the mortgage, wedding and babies come into the equation.


As I write this, it’s helped clear my thoughts a little and it’s also highlighting to me that a few of the “stumbling” blocks we are encountering are primarily to do with timing, trust, expectations and communication and also very importantly his desire to have his own property and independence, as well as my desire to be an equal partner and be given the opportunity to contribute towards our future.

I see it as a common sense not a trust issue. You barely know one another and you have not lived together, neither of you have have much in the way of savings. That whole last paragraph seems quite biased, you are actually suggesting he is not giving you the opportunity to contribute to your joint future and not treating you as an equal partner instead of simply following his dreams!! Saying he wants independence could read as you are intimating a lack of commitment, when you are only planning on marriage and children eventually.

I am not doubting you have a potential future but you cannot possibly say you are compatible living together nor the stresses and strains of home ownership, things going pear shaped with job or the place itself, the stresses of pregnancy and a young baby, illness or injury preventing work and meaning one is financially reliant on the other.

How badly do YOU want this, if you want it really bad why are you referring to holidays travelling and having fun, why not live on a shoestring for a year and save like a demon? IMO you both need to consider your priorities, is is nesting or is is being young?

Loaned deposit is a non starter lenders want no strings funds, it would have to be gifted or saved. You also need money set aside in case of illness or injury, redundancy, unplanned difficult pregnancy, sick baby. And you need that from day one, preferably three months mortgage and insurance payments since Support for Mortgage Relief does not kick in until then. Maybe more, depending what you earn you could be entitled to very little means tested benefits if something happened.

Have you researched the property market locally and done the maths, would he really make a profit in two to three years once ALL the costs of buying and selling (estate agent, legals, survey, service charges, ground rent, insurances, decorating) are taken into consideration? That only holds in a steeply rising market. Property is a gamble in the shorter term, an investment longer term. That is not a reason to take your route and make a family home your first purchase when you are nowhere near in a family home head space. What you describe as pooling your resources is actually a much larger financial burden.

Agree a joint mortgage is more of a commitment than marriage in many ways. You can be stuck by negative equity, by splitting up and one refusing to sell or refusing to contribute to the mortgage, you could be tied together for years after the relationship is over, it's extremely difficult to force a sale. Divorce definitely is easy by comparison.

G_M

R_P_W wrote: »

What does marriage have to do with it?

I know plenty of people who are not married who have joint property ownership.

Whether doing it after being together for a few months and having not lived together before is a good idea should be the question.

Oh dear! So literal!

I did not intend to start a moral or philosophical debate on the pros/cons or rights/wrongs of marrage Vs .. ehem!... living in...

My point was to drive home the level of commitment a joint purchase represents.

How many threads have we seen where couples (or for that matter family members) have jointly owned, then either fallen out or had changes in their life circumstances and discovered the problems inherent in, say, one party wishing to sell/move out/let/whatever and the other wanting to retain their home.

Or the disputes over respective 'shares' in the equity (or debt!).

etc.

ivanap

Thanks for the comments and input so far, much appreciated. I think renting together to see how that pans out, before committing to buying would be my preferred route. And at the same time we'll be saving for a deposit for a future mortgage together. If after a year or so, it doesn't work out, we have both saved a fair bit and can then make own arrangements about buying property, etc. No-one's out of pocket.

My last paragraph's not meant to be biased....he has his dreams and I have my dreams and hopefully these will fuse well for our future together, as well as protect both our financial interests and potential to borrow, etc. in the future. His dream of buying a property currently rests on money he doesn't have (the money from his father will be declared as a gift, but it's a loan), so I am concerned that potentially him buying too early and with little savings, could impact our ability to borrow together in the future...and yes if he buys on his own, the responsibility rests only on his shoulders, whereas if we buy together, it's an even split.

Yorkie1

ivanap wrote: »

His dream of buying a property currently rests on money he doesn't have (the money from his father will be declared as a gift, but it's a loan).

Be under no illusions. If it is declared as a gift but is actually a loan, this will be mortgage fraud.

Both your OH and his father will have to sign a declaration or letter confirming that the money is a no-strings gift.

If the lender were subsequently to find out the truth then a fraud marker will be placed on their files (and, by association, potentially yours too). This marker would mean it is far, far more difficult in the future to get any financial product, be it a credit card or insurance etc.

Do you really want to start a joint life together with this hanging over you?