Partner moving in how to sort mortgage?

AdmanPea

Hi 

So I have a mortgage on a property and I have paid approx 40k off what I paid for it via deposit and a few years of mortgage payments.

My partner is selling her property and we’d like to get her on this mortgage as a co owner so we both have equal stake in it. 

My question is: financially do I basically halve what I have paid and then she gives me 20k to be added on or is it half of the difference of what the house is worth now vs what I paid ? (which is more) 

Or is neither way correct? 

My assumption was she just needs to give me half of what I’ve paid off the original amount and then I do what I please with that money 

MWT

There is no simple answer, but if you want to be accurate, you would get a valuation and deduct from that the current outstanding balance on the mortgage, that gives you the equity you own in the property.

If she gives you half of that figure and then pays half the mortgage each month, and half of any property improvement costs going forward then you are equal.

400ixl

You need the current value and the current outstanding amount. Deducting the amount left from the current value gives you your current equity.

So say it is a £300k home today and your remaining mortgage is £200k then you have £100k of equity and £200k of debt.

Your partner could then either pay £100k off the mrtgage and be an equal partner with £100k of debt left to pay, or give you £50k and you will both have £200k left to pay still.

Which is more important, having cash in your bank or reducing the mortgage?

elkiedee

If she wants to be on the mortgage deeds, I think you need to apply to the lender, and if she's putting in a significant amount of money, then presumably she would want that to be reflected on documents. Are you on a fixed or variable rate, and are you currently tied into the mortgage? If you have already increased the equity since you bought, and if she is going to put capital into the property, reducing the amount owed, have you considered remortgaging?

I would suggest that you also both get proper advice so that if anything bad happens to one of you, the other's interests in the house are protected (issues of inheritance, tax, legal rights in relation to any mortgage/other secured or unsecured debts).

Emmia

And "partner" I presume you're not married?

If the relationship should flounder, will you be/are you in a position to buy them out to return the property to your sole name if needed?

Do wills etc., need updating as a result of this? You should both have independent legal advice on this change, and any upsides/downsides.