Contributing to someone else's mortgage

KateyKTM

My fianc!e and I both own (with mortgage) separate properties. His house is much larger than mine and we have plans to renovate then move in there together when we marry next year. I will keep my own property and rent it out. Once I move in I would like to contribute towards the mortgage payments on his property and would also like to assist with the cost of the renovations. This will be necessary as I am the higher earner. However as I have not contributed towards the deposit or the monthly payments made since he has owned the property (2 years) we both want to ensure the money we pay in is safe should we split up or if one of us died. Can anybody tell me whether it is possible to create a contract whereby should we split up or sell the house, we are both entitled to the total of the money we have already contributed + the proportionate percentage of any remaining equity without adding my name to the mortgage or deeds? And is this is possible what happens if he dies and my name is not against the house?

getmore4less

Once your married what will he be putting in his will?

You can create docs to cover this once you know what you want.

One way is to work on equitable shares of the property covered by cash or servicing debt.

If both agree a target might be to try for 50:50 from some point.

It will depend on the numbers, value, incomes, savings, refurb cost how to structure it.

It may be the split, kids, death need different exit scenario.

KateyKTM

I'm unsure what he will be putting in his will, I would say that's up to him. Should he leave the house to a family member will I loose any money I've put in unless I am on the deeds? In the event of a sale would it be possible to agree he takes the first £X followed by a 50:50 split of the balance?

Thrugelmir

If your name isn't on the deeds. Then what ever piece of paper you are holding may require legal action to enforce. Your other half could do as they wish with the equity in the property. Appreciate that this example is extreme but it's the reality. Warring ex's take no prisoners.

Is holding onto your old property worthwhile? Something to be considered in the cold light of day. With hard financial facts and no sentiment.

KateyKTM

Thank you for your honesty. I believe it to be worthwhile holding onto my own property since it will yield a good rental income and will be mortgage free some 30 years before I retire. Granted this equity could be put towards the main house but I just know I want something that's mine. So do you suggest I get my name on the deeds but not necessarily the mortgage? If I am not on the mortgage will any payments I make be classed as rent and be therefore taxable? Or does putting my name on the deeds change this?

Thrugelmir

You'll need to be named on the mortgage to be named on the deeds. Appreciate that you want something of your own. Once you are married then what's yours is theirs and vica versa.

amnblog

You can only protect your legal position via legal advice and subsequent action. Consult a solicitor.

antrobus

KateyKTM wrote: »

.... Can anybody tell me whether it is possible to create a contract whereby should we split up or sell the house, we are both entitled to the total of the money we have already contributed + the proportionate percentage of any remaining equity without adding my name to the mortgage or deeds?....

Yes. It's called a Deed of Trust or a Declaration of Trust.

Consult a solicitor.

KateyKTM wrote: »

.... And is this is possible what happens if he dies and my name is not against the house?

His executor will have to abide by the deed of trust.

getmore4less

KateyKTM wrote: »

I'm unsure what he will be putting in his will, I would say that's up to him. Should he leave the house to a family member will I loose any money I've put in unless I am on the deeds? In the event of a sale would it be possible to agree he takes the first £X followed by a 50:50 split of the balance?

Equity based shares work out better, the get your money back method is the equivalent to a interest free loan.

Have a search for other threads on this there are loads, some are because the deed drawn up was inadequate.

If the trust deed says you have a beneficial interest then it also needs to describe what happens on death if someone else becomes legal owner and part beneficial owner.

If you want your place why not let him keep his and you just live there.

Mojisola

KateyKTM wrote: »

I'm unsure what he will be putting in his will, I would say that's up to him.

Once you're married, that's not quite true. Married people have legal obligations to each other.

If he left the family home to someone other than you, you would have a good case to challenge the will.