Couple buying house when one puts in 90%+ of cash?

RSharkR

Hello everyone, I'd appreciate some advice please...

Myself and my partner (engaged to get married next year) are looking at buying a new house. I expect to be contributing the vast majority of the deposit/full cost and want to know how best to deal with it. 

The house is £270k - I have about £200k deposit (including part exchange on my current house which I own fully) and my parents could potentially lend me the rest, ideally leaving my with no mortgage to worry about. By contrast my partner only has £10k in savings to contribute.

We also have contrasting situations - she has a relatively low paid job so doesn't want huge monthly repayments, either mortgage or to my parents. I have my own business and (for the moment at least) earn quite decent money so am keener to pay off larger sums monthly to clear debts. 

For info, I currently wholly own my own home, which she (and her dog) moved into about 2yrs ago and pays half of the bills but nothing more. 

I suppose there's a few ways of dealing with this, assuming I don't just want a 50/50 split, but I'd like advice on the pros and cons of the options and if I've failed to consider something:

- Is the most sensible way just to divide the house value and ownership in the deeds according to the cash we put in (say, £260k mine, £10k hers - roughly 96% to 4%??)
- Part of me thinks it feels a bit silly to divide a house by such a proportion - is it better that I wholly buy it and she contributes in some other way, for example paying the stamp duty/legal fees or for any upgrades etc? Or should it be like a landlord/tenant situation where she pays me back some rent (as well as half the bills)
- Irrespective of how much she puts in, should she be contributing more than just half the bills? For example some rent-like contribution? It feels odd to have this in a couple, but equally it seems strange for her to live in a £270k house without having really contributed. A close friend tells me I'm mad for not agreeing some sort of rental situation with her in my current house, particularly given that the general wear and tear on the property has increased significantly since it was basically a bachelor pad (and she has a dog!)
- Is it wiser to go down the route of a mortgage instead of me paying everything if this potentially provides any extra legal protection?

Thanks in advance.

AdrianC

It will never be a "landlord/tenant" situation - few landlords make a practice of sleeping with their tenants (or even lodgers, since you're also resident)...

I presume you're thinking in terms of what'll happen if you split. If you think that's even remotely likely in the short to medium term, then simply don't buy the house together and don't get married... Of course things can change in the longer term - and the house will be part of the financial settlement of any divorce, regardless of the ownership split.

You may be better thinking in terms of joint tenants, so the property does not form part of the estate in the event of one of you predeceasing the other.

Mortgage does not affect the legalities - it's just a question of whether it's money borrowed from your parents or from a commercial lender.

Stenwold

Will you ever want her to feel like it's her home? You're sounding like you'd rather be seen as a live-in landlord than a couple planning to spend the rest of their lives together in a family home!

xylophone

Would it not be wise to stay in the current property on the current basis until you have decided that  you want to share your lives and have actually got married?

[Deleted User]

Stenwold said:

Will you ever want her to feel like it's her home? You're sounding like you'd rather be seen as a live-in landlord than a couple planning to spend the rest of their lives together in a family home!

At the same time, couples do split up, why would OP want to end up in a 50/50 split of home ownership if he paid in 90% of the cost? I pay rent to my partner who owns the house we live in (on a mortgage). It's much below market rent rates but it works for us as she earns maybe 4x what I do, I don't have any claim to the house but it still is our home.

Salemicus

- Is the most sensible way just to divide the house value and ownership in the deeds according to the cash we put in (say, £260k mine, £10k hers - roughly 96% to 4%??)

Sounds like a reasonable starting point. Other starting points would also be reasonable. But you need to sit down and discuss it with your partner, and amicably come to a position you are both happy with and both think is fair. If you can't do that, you shouldn't buy a house together.

- Irrespective of how much she puts in, should she be contributing more than just half the bills? For example some rent-like contribution? It feels odd to have this in a couple, but equally it seems strange for her to live in a £270k house without having really contributed.

If you really believe this, please don't buy a house together.

RTC87

Do you want a tenant with benefits or a wife!?
Find questions like this crazy and somewhat disheartening as this is the outlook people have.
You are getting married, making a commitment to eachother for life "for better or worse", in my book that means everything should be shared and you move forward together, does it matter that she hasn't contributed to the house payment?
If you are planning for if things don't work out maybe don't get married and don't purchase together.
I earn far more than my partner but we are a team, what we have is ours. If I was with anyone with this attitude it wouldn't make it to day two. 

steampowered

Personally, I would ask your fiancee to take a mortgage to pay for a greater share of the property. For example, if she has a £22k salary, she can easily raise a £100k mortgage, which with her £10k savings would give her 40.7% of the property.

She will get a low interest rate on the mortgage as the property will have a low LTV, so her monthly repayments should be very affordable.

You will have to be "joint borrowers" on the mortgage application. But you can specify in your "Deed of Trust" that she is responsible for making all repayments on the mortgage.

That's better for her, because she gets a bigger stake in the property. It's better for you, because you don't need to borrow from your parents, and is emotionally easier than charging your fiancee an arbitrary amount of "rent". 

You can use your leftover deposit money to open a stocks & shares ISA, which will generate a better return than the property, and give you more diversification and flexibility than having 100% of your assets tied up in the property.

While you are getting married so your finances will eventually become joint, personally I think it makes sense to keep finances a bit separated. At least before you have kids. 

freesha

Smaller figures, but I brought £15k to the deposit for pur house. My then-fiance brought nothing. But it is OUR house and OUR money - everything is split.

Robin9

fleur8 said:

If you’re getting married surely it doesn’t matter what she’s contributed? If you were my partner I’d be a bit upset about what you’ve written. I’d rather not live in the place at all.

Likewise.
I already had a house when I met my future wife - and it went into joint names when we married.  There was no question of who contributed what or who owned what -  our finances went into a common pot.

OP - if you haven't got confidence in the relationship ..........................................

Falafels

'It feels odd to have this in a couple, but equally it seems strange for her to live in a £270k house without having really contributed.'

We all bring a contribution to relationships, be that material things, life experience, excellent DIY/cooking/gardening skills, emotional support, fun, companionship... the list is endless. In your case it includes a house which provides secure accommodation with no worries about how to pay the mortgage or rent - worries which can really damage your quality of life.

If she really contributes nothing to your relationship, you shouldn't even be entertaining the thought of marrying her. If you're approaching this from the point of view of a landlord with a lodger, you shouldn't be entertaining the thought of marrying her, but get proper advice on how to manage this as a business transaction.

When you say you want to know how best to deal with this, how did she respond when you discussed this together? I take it you did discuss this with her first, before consulting a bunch of strangers on the internet, and a close friend who thinks you must be mad not to be charging her rent?