Partner owns house. I paid for extension. Now pay off mortgage

shell145

A few years ago I moved into my partners house. Around 18 months later had a baby. Now have another baby together.

We have a bit of a funny relationship in a way, I feel. Especially financially. No joint bank account, bills all in his name and I transfer x amount to him each month. 

Around Jan 2020 we had his house valued. I believe £320, he remembers £350. It was said verbally.

March 21, our extension started and I paid £80k cash for our extension, plus a new patio.

Next month his fixed term mortgage deal is up and the plan is for me to pay it off, from inheritance. 

I want something legal around the extension money I put in and obviously paying off around £95k mortgage.

I want to be on the house deeds and be part legal owner, which I think is what most people in my position would want? Partner doesn't understand why, and how it makes a difference, but we're not married and I need to cover myself incase of a separation or even his death. Tho he says if we cab agree the figure and I pay the legal costs (or most of) then fair enough

I haven't paid towards the mortgage here. Simply as I was living in my mortgage free property before I met him, was happy to pay if I went on deeds, which he didn't want and the last 2  years I've been on maternity (and had to reduce my hours due to the nature of my business, for a lot of the first pregnancy)

Can anyone think of a way to decide what percentage we split? Could get the house valued now, but the extension has obviously added a lot of value.

House prices were also all time high when i paid for the extension (builder costs went up 10% from quote to start date), but prices have dipped again now 

At the time, estate agents expected the extension could get the house worth approx £425-450k

On-the-coast

Easiest way to sort this out is marriage or civil partnership.  That would provide clarity for you, him & children - assets are shared no matter how you handle day to day finances. 

But if you’re determined that is not an option, 
then without explicit valuations & dates at the various points at which you started inputting money (and children together) then a 50:50 spilt of the house seems reasonably close based on what you have said and taking into account the unknowns of valuations versus real sale figures. 

If you did it more accurately then maybe 45:55… but that seems a bit “cold!”
best wishes 
- and yes you need something on paper…

Emmia

You're not on the deeds, but you paid for an extension (really you should only cover bills to not be taking a stake in his property), and he'd like you to pay off the mortgage too, but doesn't seem keen on giving you the stake you're effectively buying/have bought.

Personally I wouldn't have paid for the extension (which has added value to his property) without going on the deeds, and I definitely wouldn't pay off the mortgage in your position. His fix is ending so if you don't pay it off he'll either go onto the SVR or he'll need to get another fix.

There's nothing wrong with having your own accounts, and the bill paying working as it does - we have a similar set up (but we also have a joint account which covers the groceries, and a joint savings account to cover home maintenance) + we're married (no kids though), and our place is in both names.

You're not married (any reason for this) but you have kids together - so in some ways you're in the same position as a lodger (i.e. no rights) potentially with small people in tow - what currently stops him booting you and the kids out, how would you extract the £80k / relevant percentage of current property value out of him in that situation??

I'd say to him that the price of the mortgage being paid off, is you being on the deeds for that value + the value of the extension as a percentage of the current property price. No ifs, or buts.

elsien

Is he aware that by paying for the extension ( I presume you have proof of this) you have anlready acquired a beneficial interest in the property.

And quite honestly if he expects you to pay off his mortgage without anything in return then he’s deluded.

badmemory

Keep your inheritance & save to increase it.  You may well need it to buy a property as he does not seem to have any long term commitment.  Sorry to sound so harsh but you do not want to land up with no home & no money either.

Brie

You need to be at least 50/50 on the deeds given the commitment and the fact that children are involved too.  You also need wills that outline what's his and yours and what happens when the worst happens.  

BungalowBel

Don't pay any more large amounts into his house until this is reflected in the ownership details, or you get married/civil partnered..

shell145

Lots to reply to

It's me wanting to pay the mortgage off, as I don't want large amounts sitting in bank accounts depreciating. He'd be happy me not paying the mortgage off tbh.

We plan to move in 4 or 5 years, that would be both our property from the start

I did pay for the extension at my request, he could've paid more than he did. But again, I wanted more of my money in property and for it to be our home. To me, its only home if you own. And legally, I have beneficial interest to the property even tho I'm not yet on the deeds.

Say the valuation was £350 in Jan 21, pre extension. He had around £250 equity as around £100k mortgage.

Say its now worth around £385 (guess!) imagining the extension doesn't exist. That's £285 equity. If we say the 80k has added 80k (could be more,could be less) that's £465 valuation, would bring to 60 him, 40 me... OK that (single storey) extension could have added £20k extra, but we did pay crazy money over budget for it.. and I doubt the max it would achieve now is at £485!

Or do we get it valued now and will that help or is that unfair to me? (House prices have slumped now compared to when extension was done last yr)

Other replies,  no I don't want to get married. I'm his beneficiary for 200k work payout if he dies. No will for either of us yet, but a will can be changed at anytime without anyone else knowing anyway.

I will be going on the deeds certainly if pay off mortgage. Its working out the %

Also, I think I'll need to pay 3% stamp duty, due to owning another house. So unless there's a loophole, maybe I should wait until I sell,prob within 1-2yrs... or put rent up to effectively claw some back (Haven't put up in 3yrs)

Keep_pedalling

If you don’t want to get married you might like to consider a civil partnership, as it stands his estate is already over his nil rate band and with no spousal exemption available you could be looking at a significant IHT liability if he met an untimely demise. 

Not being married or in a CP with no wills in place is frankly irresponsible. Intestacy laws would mean if either of you died your estate would be inherited by your children and would have to be held in trust until they are 18 when they would be free to do whatever they want with it. You should also both put lasting powers of attorney in place to avoid a financial nightmare if either of you lost mental capacity through accident or illness.

RAS

There is nothing to stop someone changing their will at any time without anyone knowing else anyway.

There is nothing to stop someone changing their death in service nomination form at any time without anyone knowing else anyway. In fact is easier, because it can often be done on line with the click of a button.

And you don't own another house, so you'd not be paying the extra 3% stamp duty.

You might at some point be able to extract money from your partner because you have beneficial interest in the house but he could get difficult and force a court case the costs you £tens of thousands. Possibly more than the extension increased the value of the house.

You are legally a lodger, providing extra services and mother of his children. And you currently have no legal stake in the property he owns.

Paying off his mortgage would be an absolute dereliction of duty towards your children. Until you marry or enter a civil partnership or are formally on the deeds, their situation is precarious. They could be homeless tomorrow.

shell145

RAS said:

There is nothing to stop someone changing their will at any time without anyone knowing else anyway.

There is nothing to stop someone changing their death in service nomination form at any time without anyone knowing else anyway. In fact is easier, because it can often be done on line with the click of a button.

And you don't own another house, so you'd not be paying the extra 3% stamp duty.

You might at some point be able to extract money from your partner because you have beneficial interest in the house but he could get difficult and force a court case the costs you £tens of thousands. Possibly more than the extension increased the value of the house.

You are legally a lodger, providing extra services and mother of his children. And you currently have no legal stake in the property he owns.

Paying off his mortgage would be an absolute dereliction of duty towards your children. Until you marry or enter a civil partnership or are formally on the deeds, their situation is precarious. They could be homeless tomorrow.

I do own another house. Mortgage free. One I rent out to friends. I would not pay off the mortgage without going on the deeds. The main purpose of this post is to help work out a fair way to work out the % based on extension in 2022 and paying off mortgage end of 2023.

I'd expected to sell my house by now and pay off the mortgage with that money. Thus officially partners house, our home becoming legally our house. However, tenants wish to stay there a while longer (could be 6 months, could be couple years). So I would effectively borrow some of my inheritance money until the time I sell my house. However, the 3% stamp duty is making me rethink things.