Relationship/financial inequality/house ownership

kitrat

I need opinions, I'll try to keep it fairly factual:

A year ago I bought a house and put down £110,000 deposit and took out £86,000 mortgage in my name, paid all fees etc. Money was a mixture of my own savings and gifted money from Father and Grandfather (basically gave me inheritance early, he's still alive, inheritance tax all considered with financial adviser etc don't worry about this).

My fiance was in debt which really needed to be paid back. Rather than buy a house together we thought it was best I buy the house and he use the rent-free position to assist in him paying off his debts much more quickly (he doesn't contribute to mortgage). He's been solidly ploughing away at his debts and should be debt free in about a year at roughly the same time the fixed term of the mortgage comes to an end.

We had discussed that at this stage we would reconsider the house-ownership situation. We'd thought we'd probably be married by then but looks to almost certainly not be the case as we are lazy wedding planners. I suppose I don't really know to what extent I'd feel differently about the disagreement we're in if we are/aren't married at that stage.

The mortgage broker had suggested previously that we could arrange some sort of proportional ownership at the point of renewing the mortgage which I thought sounded pragmatic. I suppose on paper it would equate to a roughly 25% to 75% split which I can appreciate wouldn't feel great for fiance as this is his home as much as mine. I don't really consider it to be 'my' house on a day to day basis this is very much 'our' home.

Now I've bought this up again recently and fiance is v upset. He feels that since we will be married at some point we should just remortgage together, just standard joint mortgage. He is upset that any thought of proportional ownership is a poor footing to start a marriage off on, which I understand and I suppose is not really the point of marriage. He feels on unequal footing as it is and was hoping this would end and feels this would continue the unequalness. And I totally get that point of view and feel this financial disparity is a real bloody headache and it's not as if he's ever going to able to match the amount paid in by me and I certainly don't expect anything like that.

On the other hand I have reservations about the situation. He won't have put any money into the house at that point of joint ownership. So on paper after one year of joint ownership we could break up and he'd have paid in ~£2000 and I'd have paid in ~£116,000 but we'd have 50/50 ownership. So whilst I'm never suggesting he's going to turn around and run off it just doesn't seem like anyone would ever advise doing this. But at the same time it does prolong the inequality in the relationship. And then you never know what happens down the line and people do break up, not that I'm expecting us to. I suppose from his point of view he feels that it looks like I don't trust him or don't have faith in the longer term relationship. And the reality is I think he's a pretty reasonable and moral person and would like to think that should the worst ever happen he would not be unreasonable.

Blah. Don't know how to resolve this at all. Please give me some advice.

PasturesNew

Stick to your guns.

The pragmatic viewpoint is: If I don't do what you want and you leave me, I'm better off. If I do go along with what you want and you rinse me and walk away with MY money, then I've been really sucked in.

If he respects you and feels the relationship will go the course, he'd wind his neck in

He's acting a bit needy to be honest. Stick to your guns. What you're doing is the sensible thing. You're not both on the same page with this, you're not trying to cheat him, but he COULD be a master at scams.... so hold on.

If he walks, he walks..... better than being ripped off and him walking. Don't be bullied into anything by somebody trying to play on your emotions to get their own (financially lucrative) way, when there's no need to do that at all if you're going to be married at some point.

Mojisola

kitrat wrote: »

A year ago I bought a house and put down £110,000 deposit and took out £86,000 mortgage in my name, paid all fees etc.

My fiance was in debt which really needed to be paid back.

he use the rent-free position to assist in him paying off his debts much more quickly (he doesn't contribute to mortgage). He's been solidly ploughing away at his debts and should be debt free in about a year at roughly the same time the fixed term of the mortgage comes to an end.

Now I've bought this up again recently and fiance is v upset.

He feels that since we will be married at some point we should just remortgage together, just standard joint mortgage.

He feels on unequal footing as it is

His position is unequal because he came into the relationship with debts and you came into it with savings.

You have supported him with free housing while he has worked at repaying his debts - doesn't he appreciate that?

Personally, I'd suggest that you remortgage in your own name and he continues saving to build up a nest egg - after an agreed period of time, that lump sum could then become joint money, perhaps used to pay off some of the mortgage, and he could then become an owner.

I'd want to be very confident that he wouldn't get into debt again before becoming financially linked with him.

If you marry, the situation will change and he will become entitled to a share of the house if you later divorce, whether he has put any money into it or not.

Tom99

He's living rent free but that's not enough, he want half your house!
If you have your head screwed on you will keep hold of what you have paid for a few years to come at least.
If you decide to add him as an owner and share the cost of the mortgage then make sure you have a deed of trust to protect you interest.
Based on your purchase figure that would say the on a sale you get back 56% of the gross sale price then anything let over after the mortgage is paid off you split 50/50

kitrat

Well I don't really want to post any emotional responses at his stage but would like to say that I don't think he's money-grabbing etc etc. He is a 'what's mine is yours' person and does not quibble about being generous to others himself.

I realise I have neglected to mention that his grandfather gifted him £5000 to buy furniture with for us and that has been really helpful to us so it's not all this one-way street.

kitrat

Also to add he would have gladly purchased the house together, contributed to the mortgage and paid off his debts more slowly. I made the suggestion to do it this way instead.

onwards&upwards

Here’s what i’d Do if I was you:

1. Get married, next registry office appointment will do.
2. Wait 2 years at least, in that time he should save sensibly (in his name only) and turn around his financial habits and the two of you should work on a joint budget that allows for this and doesn’t leave either of you feeling ripped off or vulnerable.
3. If in 2 years (or whatever tim scale you agree on) things are going well, let him use his savings to put into the house and add him as a joint tenant (joint, not a tenant in common).
4. From that point on plan everything together, joint savings, pension planning etc.

If you want kids you don’t want to be going into that on a ‘his and yours’ situation it will have to all be ‘ours’.

kitrat

onwards&upwards wrote: »

Here’s what i’d Do if I was you:

1. Get married, next registry office appointment will do.
2. Wait 2 years at least, in that time he should save sensibly (in his name only) and turn around his financial habits and the two of you should work on a joint budget that allows for this and doesn’t leave either of you feeling ripped off or vulnerable.
3. If in 2 years (or whatever tim scale you agree on) things are going well, let him use his savings to put into the house and add him as a joint tenant (joint, not a tenant in common).
4. From that point on plan everything together, joint savings, pension planning etc.

If you want kids you don’t want to be going into that on a ‘his and yours’ situation it will have to all be ‘ours’.

Thank you for your advice and for not leaping to conclusions regarding motives etc.

To be honest I'd be very happy with the arrangement you've described. And we would most likely want kids one day. Practically that will most likely need to start occurring by probably 3 years time and certainly you're right there can be no yours/mine. I would ideally like that arrangement to start prior to children (well I think it should be like that when you get married).

Just a question: 'Joint tenants' means effectively 50/50 shared ownership, whilst 'tenant in common' means something else?

Mojisola

Joint tenants means you both own all the house; tenants in common means you own specific percentages of the house.

onwards&upwards

kitrat wrote: »

Thank you for your advice and for not leaping to conclusions regarding motives etc.

To be honest I'd be very happy with the arrangement you've described. And we would most likely want kids one day. Practically that will most likely need to start occurring by probably 3 years time and certainly you're right there can be no yours/mine. I would ideally like that arrangement to start prior to children.

Just a question: 'Joint tenants' means effectively 50/50 shared ownership, whilst 'tenant in common' means something else?

It’s not always easy merging two independent lives into a partnership, when people didn’t live alone or have any of their own assets before getting married it was simpler!

Joint tenants mean you each own 100%, completely joint, if one of you dies the other still owns 100% of the house.

Tenants in common means you each own a share, this can be 50/50, 90/10 or any other split you agree on. You can each leave your share to your child, your best friend or the donkey sanctuary if you want and then they become the co-owner with the surviving spouse.

kitrat

Thank you both. That is what I'd guessed and would be happy as joint tenants in the arrangement described above.

onwards&upwards wrote: »

It’s not always easy merging two independent lives into a partnership, when people didn’t live alone or have any of their own assets before getting married it was simpler!

No truer words have been spoken! Fiance has said previously he'd be happier we both didn't have any money and were on an even footing just getting through it together than the current situation.

Not that I'm ungrateful for the massive financial step up we've been given that many of ours peers don't have. But it would certainly be simpler and less hurt feelings the 'normal' way.