Buying a house with my spouse

normal

Hi
This is a bit of a delicate situation about buying a house with my OH, and I'm looking for some advice. I'll try to give some background as well to provide context.

OH and I have both had previous relationships and have teenage children of a similar age. We married two years ago, and have been renting a home, but are now looking to buy a home, and also renovate a house OH has inherited abroad, with a view to moving there in the future. OH earns much more than me (I am self-employed and my business is taking time to establish), but I have significantly more assets (property). We also have a prenuptial agreement where in the event of a divorce, we each keep what we previously owned, and the remainder is divided equally.

Because of prior divorce agreements, wills etc, our aim is to leave each child with approximately the same amount of property in future. For that reason, we would like OH to own the new home, inherited home and previous home (currently let); and for me to continue owning my existing rental property.

Our plan is to borrow a total of £600,000. That would break down to roughly £300,000 for the home. £100,000 to renovate the home. £150,000 to renovate the house abroad, and invest £50,000 into my business. I would borrow £410,000 against my rental property (I appreciate this makes me sound rich, but reality can be different...), and OH would take a separate mortgage of £190,000 against the new home, but would pay £550,000 of the mortgage repayments (with me paying the remainder). Because of the way the mortgages are being set up, they would each be in sole names.

The issue we're facing is how to make arrangements just in case our marriage doesn't work out for any reason. (I'll be honest and say I fear that more possibly because of the issues from my previous marriage are fresher and financially more traumatic). OH never liked our prenuptial (felt it insulting - which I sympathise with emotionally), and says to trust them (they've never given me any reason not to, but divorces aren't nice things.... ). I would prefer some sort of legal agreement although I hope never to need it.

All genuine help and advice is welcome. (And thank you for your time if you've got as far as reading this!)

[Deleted User]

normal said:

Hi
This is a bit of a delicate situation about buying a house with my OH, and I'm looking for some advice. I'll try to give some background as well to provide context.

OH and I have both had previous relationships and have teenage children of a similar age. We married two years ago, and have been renting a home, but are now looking to buy a home, and also renovate a house OH has inherited abroad, with a view to moving there in the future. OH earns much more than me (I am self-employed and my business is taking time to establish), but I have significantly more assets (property). We also have a prenuptial agreement where in the event of a divorce, we each keep what we previously owned, and the remainder is divided equally.

Because of prior divorce agreements, wills etc, our aim is to leave each child with approximately the same amount of property in future. For that reason, we would like OH to own the new home, inherited home and previous home (currently let); and for me to continue owning my existing rental property.

Our plan is to borrow a total of £600,000. That would break down to roughly £300,000 for the home. £100,000 to renovate the home. £150,000 to renovate the house abroad, and invest £50,000 into my business. I would borrow £410,000 against my rental property (I appreciate this makes me sound rich, but reality can be different...), and OH would take a separate mortgage of £190,000 against the new home, but would pay £550,000 of the mortgage repayments (with me paying the remainder). Because of the way the mortgages are being set up, they would each be in sole names.

The issue we're facing is how to make arrangements just in case our marriage doesn't work out for any reason. (I'll be honest and say I fear that more possibly because of the issues from my previous marriage are fresher and financially more traumatic). OH never liked our prenuptial (felt it insulting - which I sympathise with emotionally), and says to trust them (they've never given me any reason not to, but divorces aren't nice things.... ). I would prefer some sort of legal agreement although I hope never to need it.

All genuine help and advice is welcome. (And thank you for your time if you've got as far as reading this!)

Have you both spoken to a mortgage broker(s) to find out if what you want to do is even feasible? Would a lender allow you to release £410k from your rental property based on the rental income and/or self employment income to invest in properties you won’t own and your business? 

I can also see a mortgage lender having an issue with you contributing money towards the new home, living in it and not being party to that mortgage. 

Comms69

What kind of return are you getting on your rental property. BTL LTV must be 70% - so if' you're taking £400k out, and still leaving 30% equity in - then the property must be worth a fortune. 

normal

Lover_of_Lycra said:

Have you both spoken to a mortgage broker(s) to find out if what you want to do is even feasible? Would a lender allow you to release £410k from your rental property based on the rental income and/or self employment income to invest in properties you won’t own and your business? 

I can also see a mortgage lender having an issue with you contributing money towards the new home, living in it and not being party to that mortgage. 

Comms69 said:

What kind of return are you getting on your rental property. BTL LTV must be 70% - so if' you're taking £400k out, and still leaving 30% equity in - then the property must be worth a fortune. 

Many thanks for your thoughts. The lenders have already agreed to the loans and we're currently going through the final processes with the underwriters etc.
I would have to sign a waiver form that I will be contributing, but not having the property in my name. I have no issue with that as long as I can have the assurance of the finances being settled if we ever divorced (OH's earnings can easily cover)

Comms69

as I can have the assurance of the finances being settled if we ever divorced - bad news im afraid. Pre-nups are not legally binding, so you cant have that assurance beyond taking things on trust

normal

Comms69 said:

as I can have the assurance of the finances being settled if we ever divorced - bad news im afraid. Pre-nups are not legally binding, so you cant have that assurance beyond taking things on trust

That's true in England, although a fair agreement is normally upheld.

Keep_pedalling

You don’t say what country this second home is in but, inheritance laws very vastly between countries, so you need to prioritise sorting out your wills, and you will probably need a separate will to cover the foreign property.

normal

Keep_pedalling said:

You don’t say what country this second home is in but, inheritance laws very vastly between countries, so you need to prioritise sorting out your wills, and you will probably need a separate will to cover the foreign property.

Many thanks. That's been sorted out already