Buying a house with partner who has no money

elbii1

I have a flat and I'm wanting to buy a bigger house with my partner as we have a baby. My partner has no money to put in.

I want to enable him to build himself financially. How can I do this fairly and protect my life savings? 

I understand if we buy together we can have a tenants in common contract and state % share that belongs to each person.
He has children with his ex. As well as our baby together. Are all children including his older children entitled to inherit this home if his name is on the deeds? Or is there anything else I need to consider.

I've also considered, If I put in a 100k deposit, pay solicitor fees, tax etc. Is it fair for him to pay the mortgage? 

elbii1

Anyone else been in this situation? 

Myci85

If you buy as tenants in common, your share in the property would be inherited according to your wills, so it would be important that you each write a will to state who you would leave it to. Presumably your partner would want his share to be split between all of his children?
You can then have a deed of trust to protect what you put in. Me and my partner have just bought our first house and I put down all of the deposit as he had no savings, but the mortgage we will pay 50/50. So our deed of trust says that I will get my deposit amount back and then any additional equity would be split 50/50. There are various ways you could agree what felt fair to you both, but would definitely agree a deed of trust as whilst you of course hope the relationship stays the course, it's best to be realistic and prepare for what happens if it doesn't. 

RAS

Potentially very messy. You need a long talk, about how he might acquire equity and about how that equity would be shared in event of either death. Does he have any share in a previous home?

You need tenancy in common, a deed of trust and proper wills, done with solicitors who understand blended families and Immediate Post Death Interest trusts.

One option I've seen is that the children of the second marriage inherit a portion of the second spouse's equity, and the parent with children from both marriages inherit a (smaller) portion of that parent's equity. Obviously none actually benefit until the second parent dies.

I'd delay this as long as possible, to allow the partner to build some funds.

Edited

elbii1

Myci85 said:

If you buy as tenants in common, your share in the property would be inherited according to your wills, so it would be important that you each write a will to state who you would leave it to. Presumably your partner would want his share to be split between all of his children?
You can then have a deed of trust to protect what you put in. Me and my partner have just bought our first house and I put down all of the deposit as he had no savings, but the mortgage we will pay 50/50. So our deed of trust says that I will get my deposit amount back and then any additional equity would be split 50/50. There are various ways you could agree what felt fair to you both, but would definitely agree a deed of trust as whilst you of course hope the relationship stays the course, it's best to be realistic and prepare for what happens if it doesn't. 

Thank you. I'd not heard of a deed of trust before - this sounds like what we need! 

ThisIsWeird

Is an option for Elbii to do this entirely on her(?) own, at least until they are married/Civil'd? Ie, buy the house in her name only, mortgage obviously ditto, and partner moves in and shares all the 'living' expenses 50:50 - energy, food, BB, etc - essentially everything except the mortgage. Whether this should be 'called' anything such as 'rent', I've no idea. But I don't see why it cannot be informal. 
Possibly the simplest way to arrange this is to open an additional joint bank account and call it 'Living expenses' or similar. Each contributes a similar amount, and this is used to live on and pay the bills - with the exception of the mortgage. It's used for the SOs and DDs and for buying shopping. 

For as long as it is required, this arrangement would benefit both parties; presumably saving the partner whatever rent they are currently paying, whilst also halving their other bills; this should allow him to accumulate savings at a pretty decent rate, so providing a safety net should things change. 

For Elbii, her bills would also reduce significantly, with many of the day-to-day living expenses being effectively halved.

Partner builds savings to safeguard his future should the relationship not work out, and Elbii finds it easier to pay the mortgage on her own house whilst it does. Win-win.

If it doesn't work out, then it's, "It was good whilst it lasted, all the best, and we'll sort out the best way forward with our child...", with no complex or unpleasant financial issues to resolve or mess things up. And no risk of Elbii having to sell.

When their relationship becomes 'legal' - marriage or civil - ownership of assets automatically rewrites itself, unless they agree to tweak this.
Having a baby shouldn't complicate this, as in the worst case scenario their living arrangements return to what it was. Neither party should lose out from this arrangement. Both should gain.
Any arrangement involving actual or implied rights, 'tenants in common' or any of that malarkey will surely bring with it the high risk of the property requiring to be sold in the event of a breakup?
If Elbii needs to safeguard her position and the ownership of her property, I'd keep this as simple as the above. If the partner is not fully understanding if this, then, well, you know...

Bookworm105

by partner I assume not married 
as there would be children involved in a split it would be messy and potentially destructive
you both need to educate yourselves on what happens:
Rights to Children & Property when not married - Prince Family Law


however, without a deed of trust to document the respective % each own, then being TIC is meaningless as that document is what sets out what each own and therefore who would get the property in the event of a split !

Bigphil1474

OP, get a solicitor to sort out the deed of trust. We have one as I put less into our current house than my partner. It's not expensive to do and makes it clear who owns what. We both have wills saying what we want doing with our portion should we kick the bucket. Just needs an honest conversation with you and your partner, then the solicitor. 

In our case, my OH put more in deposit from sale of their property, I put some cash in as well as paying all the mortgage. In 10 years time, I will have paid the mortgage off, or my life insurance will have, so my 30% of the property will be paid off.

EssexHebridean

Your first issue is going to be finding a lender who will allow your partner to be on the title to the property allowing that it sounds as though they may not be able to be on the mortgage. 

Honestly, right now, if I were you, I would proceed in my own name and review in a few years when your partner is financially in a better position. 

FreeBear

RAS said:

Potentially very messy. You need a long talk, about how he might acquire equity and about how that equity would be shared in event of either death.

Not just death. You also need to consider what happens if the relationship breaks down.

pinkshoes

You need to buy as tenants in common with a deed of trust saying what happens if you split up or one of you dies.

I had similar with my ex but I put in £10k more deposit than him. The £10k was ringfenced, so when it was sold, I'd get the £10k back*, then any other equity after costs would be 50/50 as we paid the mortgage 50/50.

No kids though, and it was agreed that if one of us died, their share would be inherited by their sibling, and the other would then have 12 months to either buy the sibling out of the share, or sell the property. 

*Another friend had their large deposit as a percentage of the property that was theirs, but we left ours at £10k. It worked in my favour as we actually sold at a slight loss as prices dropped!

You need to have a conversation about this before even thinking about buying, especially about what happens if one of you dies.