Setting up with boyfriend, pay off large sum of mortgage? Plus other questions...

kr15snw

O.k, to explain the background.

Im 20, been living with my parents till now, full time student and am only bringing in about £100 - £200 a month from my part time job. Boyfriend asked me to move in over christmas (yay) and were quite happy at the moment. I pay for shopping as he understands I cant afford half the mortgage etc, and the food bill is the only thing that has really gone up (dont pay any more council tax due to being a student).

Boyfriend is 36, been living here for 8 years and currently has a 24k mortgage on the place (its worth about 120k we think). Hes just started a new term and is fixed rate for the next 5 years and has 16 years left on the mortgage. We currently pay £179 a month for this.

I have an inheritence of 14k coming in April (on my 21st). Now we are planning on moving next summer, the plan is to get somewhere that needs work (boyfriend is a builder / painter) and do it up. We wanted to buy a place for whatever we sold this for, meaning no bigger mortgage. We were then going to use the 14k to do it up as the money would be there.

But weve been talking this week and have decided it would probably be a good idea to pay off 14k of the mortgage in April. This would then leave us with a 10k mortgage on a 120k property. Which must be a good thing for us being so young!

Firstly do you think this is a clever idea?

Secondly he is now earning more and can afford to pay off more a month. But instead of just overpaying we thought about saving and when we have a lump sum (1k for example) paying off this lump sum. Do you reckon this would be advisable? We dont want to up the monthly payments as he is self employed and if he gets a bad month were screwed.

Lastly (if youve managed this long, thank you!) we were planning on getting a contract written up in case things go wrong (really takes the romance out of things! lol). My boyfriends plan was to get the place valued at the time then work out what percentage my 14k is. This seems fair I think. BUT from June I will have finished uni and am planning on starting full time work (once I get a job). Then I will be paying half of everything (weve already discussed joint account to pay same amount in). What happens then? I feel as Im paying half the mortgage my share should start to rise. Does this make sense?
I dont feel Im automatically entitled to half, as this is unfair. But I feel I should be entitled to more. My boyfriend agrees but is unsure how to do this. Any advice?

So the sum up:

1. Would it be a good idea to pay off the 14k now using my inheritence?

2. Is it a good idea to save up lump sums and pay off the mortgage quicker? As we can afford to save a bit now.

3. How should we word a contract? At the moment Im only putting the 14k in and dont pay towards bills. But from June will be paying half of everything.

Thank you so much for reading and I hope you can help!

guy999

The first thing i would do would be to check how much you can pay off your mortgage in the year, you may only be able to overpay each year 10% of the mortgage value, so check with the provider first, this way you dont have to yet consider putting 14k in his mortgage.

Also bear in mind retention charges and retention years of the new mortgage if you do then manage to pay off all at a later date , which will be within the 5 year period