RTB property, additional investor?

Henriettaah

I have searched the forums and read a great number of RTB threads and appreciate that many people disagree with the diminishing housing stock issue as a result of RTB. However - I still have an enquiry regarding RTB I'd like to put out there and see if anyone can suggest what the solution might be.

I will be purchasing my home via the RB scheme. I would probably need a mortgage for £60k. However, my partner would be able to invest £25k, meaning that the mortgage would end up being £35k.

If the property was to be sold - ever - or when it is written into wills (we both have a child each but fro previous relationships) how would the value be divided?

Would it be 50:50 ?

Would it be current value minus £25k + total mortgage paid off : the rest ?

Or ... I dunno!

Thanks for looking !

Pixie5740

Additional investor? Do you mean you and your partner would be taking out a joint mortgage or that your partner gift you £25k towards the deposit and that you would take a mortgage out on your own?

Does your partner currently share your tenancy with you? I think you can make an application with up to 3 family members who have lived with you for the last 3 months even if they're not on the tenancy. Does a partner count as family if you're not married or in a civil partnership? I'm not sure.

Henriettaah

No, it's my tenancy, yes contribution towards deposit - not a 'gift' - and the plans were that it would be my sole mortgage, not joint.

Pixie5740

It depends. Although you plan to take out a mortgage solely in your own name would your partner contribute anything towards the mortgage repayments?

Henriettaah

They'd still be paying 50% towards the monthly mortgage payment after putting £25k forward as a deposit. Just wondering how that affects the final value share for each person!

Mokka

If your partner is going to be living with you but not be on the mortgage- it's going to be a problem for the mortgage company. It's not impossible but they won't like it.
If they are contributing the deposit, they will have an interest in the property- this is another problem (bigger) for the mortgage provider.
Your partner is going to contribute to paying off the loan- is this because you do not have sufficient income? If so this is going to be another problem. Your partner will be increasing his interest in the property.

Regarding the inheritance if you are not married you both need to make wills and say what you want to happen to your share after your death.
If your partner lived with you for over a year and can prove it you can add them to your RTB application.
Is the reason you don't want your partner on the mortgage that they have bad credit or low earnings? If so the lender will find this out if you have a joint account.

The share issue has to be worked out between you and agreement drawn through a solicitor. THough it's not an iron clad protection.
The deal does not seem too good for your partner. If I was your partner I wouldn't sign up to it.

Not sure if you can get a mortgage for £35K anyway- you might need a personal loan and the rates are not so good.

Henriettaah

Food for thought there, thanks mokka

No he wouldn't be paying towards half the mortgage because I couldn't afford the repayments - simply because it would only be fair for everything to be 50:50 - you wouldn't live rent free anywhere else, would you? His £25k would be safe - always his investment and in the event of any sale he would get that back - but I guess I'm just feeling possessive over any discount I feel I have generated (yes, I know this will go down like a lead weight with the anti-rtb squad!) after being a tenant for 20 years - having been a single mum for ten years too and doing everything myself, providing for me and my kid, it's a scary prospect to give up something of my security / independence!

I would still be able to raise my own deposit, get the mortgage and make repayments with my own earnings on my own just it would be nice to be able to invest together somehow

Lord_Baltimore

Throw caution to the wind and get married! It'll simplify things :j Shall I buy a new hat?

Henriettaah

lord_baltimore wrote: »

throw caution to the wind and get married! It'll simplify things :j shall i buy a new hat?

... ...

Pixie5740

Henriettaah wrote: »

Food for thought there, thanks mokka

No he wouldn't be paying towards half the mortgage because I couldn't afford the repayments - simply because it would only be fair for everything to be 50:50 - you wouldn't live rent free anywhere else, would you? His £25k would be safe - always his investment and in the event of any sale he would get that back - but I guess I'm just feeling possessive over any discount I feel I have generated (yes, I know this will go down like a lead weight with the anti-rtb squad!) after being a tenant for 20 years - having been a single mum for ten years too and doing everything myself, providing for me and my kid, it's a scary prospect to give up something of my security / independence!

I would still be able to raise my own deposit, get the mortgage and make repayments with my own earnings on my own just it would be nice to be able to invest together somehow

The discount on the purchase price could be considered your deposit, the £25k your partner's deposit and whilst the mortgage will be in your name only you will both contribute to the repayments 50:50. Is that correct?

In that situation you might want to see a lawyer and get a deed of trust drawn up and wills especially since you both have children. Then if you're going to that much bother maybe just through caution to the wind as Lord Baltimore says and get married :j

xylophone

my partner would be able to invest £25k,

He might be better off keeping his own money in case the relationship should fail and he needs housing of his own?

By the same token, it might be wiser for you to go it alone on the house buying front?