Buying a house with girlfriend. Financial advise required please

DannyW · 15 May 2018 at 22:40

Hi Guys

I looking for some decent advise on buying a house with my GF.

At the minute I have my own place which is just in my name, at present my house is sold subject to contract, on completion of sale I will have around £80k in total (including some savings)

My GF only has around 10k saved up and does not own a house, she lodges with me at present.

We are looking at properties in the £275k-300k region.

Here is where it gets quite tricky...

We are going to offer on a house tomorrow which needs lots of work, easily 20-30k spending on it

If we put down 20% deposit on it, this will leave me enough change to get started on the work.

What do I need to do/should do about the money situation? It's essentially all my money paying for all the work, which will add substantial value to the house

Do I need a declaration of trust or a pre-nub for my 80k?

Cheers

Dis86 · 15 May 2018 at 22:41

Don't do it!

Megahurtz400 · 15 May 2018 at 22:46

I think if you've got worries like this about the Mrs. then it's probably a good idea to have a long think about whether you want to enter something as serious as a mortgage with her.

Dr House · 15 May 2018 at 22:46

Take it from a guy who just spent quarter of a million on legal fees to sort out a mess over a house

Dont do it, either you buy it alone or you both put in the same amount even if you have to get a larger mortgage.

Raymond Lin · 15 May 2018 at 22:47

Tenancy in Common.

She will take a percentage of the house should things fall apart, and you can buy her out.

.Lethal · 15 May 2018 at 22:48

I get what you’re saying OP but shouldn’t you be having this frank discusssion with your gf?

You should pay equal amounts however if you’re happy paying more and see your relationship as long term talk it through and make an informed decision, consult with your family and get their perspective. However given what you’ve said you’re showing some concerns already so is this move the right decision for you knowing most likely you’ll be paying more for getting it up to standard

wedrum · 15 May 2018 at 22:48

Dis86 said:
Don't do it!

This
Bin the misses, keep the house, stay single, bang lots of women, travel the world.

explicit4u · 15 May 2018 at 22:53

Put a ring on it!

Raymond Lin · 15 May 2018 at 22:54

explicit4u said:
Put a ring on it!

Then she'll just claim 50% of it

Street · 15 May 2018 at 22:58

Raymond Lin said:
Tenancy in Common.

She will take a percentage of the house should things fall apart, and you can buy her out.

This is what we did. I was in the same situation and put up the bulk of the money for the deposit and renovations.

danielanthony · 15 May 2018 at 23:00

Raymond Lin said:
Then she'll just claim 50% of it

Yeah, she'll get the inside and you'll get the outside.

Kemik · 15 May 2018 at 23:02

House price: £280k + £20k repairs = £300k
Total deposit: £46k (you) + £10k = £56k (20%)
Repairs: £20k (you)

House is therefore funded as mortgage of £224k + £66k from you + £10k from her.

Figure out how much of the mortgage payments you can both individually afford. If it's 50/50 then that means...
You: £112k + £66k = £178k (59% house value)
Gf: £112k + £10k = £122k (41% house value)

You split the equity as above and make mortgage repayments 50/50. Split costs of purchasing the same as above. You pay all of the costs of selling your place.

planty · 15 May 2018 at 23:04

We had a similar situation and got our solicitor to draw up a Tenancy in Common agreement.

DannyW · 15 May 2018 at 23:39

Megahurtz400 said:
I think if you've got worries like this about the Mrs. then it's probably a good idea to have a long think about whether you want to enter something as serious as a mortgage with her.

I don't have any doubts about been with her, I just want to protect my 80k, should the relationship not work out I don't want to be left with nothing.

wedrum said:
This
Bin the misses, keep the house, stay single, bang lots of women, travel the world.

does sound tempting... I can pay my house off in 6 years no sweat..

planty said:
We had a similar situation and got our solicitor to draw up a Tenancy in Common agreement.

Cheers I will speak to my solicitors about this.

Another concern someone brought up was about going 50/50 on the monthly payments. She earns approx 30k and I earn approx 50k. Because I earn more should I pay more in per month then her?

Everyone else I ask basically said it's just easily to get married...

a1ex2001 · 16 May 2018 at 01:06

DannyW said:
I don't have any doubts about been with her, I just want to protect my 80k, should the relationship not work out I don't want to be left with nothing.

does sound tempting... I can pay my house off in 6 years no sweat..

Cheers I will speak to my solicitors about this.

Another concern someone brought up was about going 50/50 on the monthly payments. She earns approx 30k and I earn approx 50k. Because I earn more should I pay more in per month then her?

Everyone else I ask basically said it's just easily to get married...

If you get married she gets half no matter what you've both put in this could be the case even with a pre-nup as they are not legally binding in the UK. Go and speak to a solicitor who specialises in this stuff take your gf with you and ensure sll decisions and conversations are joint.

nightrider1470 · 16 May 2018 at 01:30

Don't get her pregnant, unless she is chilled as F

Skillmister · 16 May 2018 at 06:25

Declaration of Trust.

You can specify different lump sums put in at the time of purchase, different percentage contributions etc etc.

Literally drafted one with almost identical details to you yesterday.

To the people saying you should reconsider buying a house with her if you have these thoughts, total bs. Everyone should have these thoughts regardless of how rosy everything may be at the time. I've been in my job for only 5 years and even so I've had a number of people I acted for when they bought, they refused my advice to consider a Declaration of Trust (and signed something to say so

) and now there are disputes because they have split up, selling the house and won't be getting their unequalled contributions back.

OP is being sensible.

PlacidCasual · 16 May 2018 at 08:58

My then girlfriend and I agreed to be Tenants in Common until we had kids because if I died I wanted my Mom to inherit, she understood this. Once we had kids I was happy to share everything as if we were married. Now I am married and nothing has changed. You're thinking the right thoughts, be open an honest would be my advice.

Kemik · 16 May 2018 at 09:02

You agree to buy the house as tenants in common wherby you each own different percentages of the property. In the declaration of trust you agree how each person will pay the mortgage, what happens if one of you wants to leave, etc.

Psycho Sonny · 16 May 2018 at 11:45

DannyW said:
I don't have any doubts about been with her, I just want to protect my 80k, should the relationship not work out I don't want to be left with nothing.

does sound tempting... I can pay my house off in 6 years no sweat..

Cheers I will speak to my solicitors about this.

Another concern someone brought up was about going 50/50 on the monthly payments. She earns approx 30k and I earn approx 50k. Because I earn more should I pay more in per month then her?

Everyone else I ask basically said it's just easily to get married...

If you get married she gets half even if you put in 100% and she puts in nothing.

In terms of the mortgage. It sounds to me like you aren't confident she is the one you will be spending the rest of your life with. This doesn't mean you won't it just means at this moment it doesn't sound like it's 100% a go.

Therefore I would just do a straight split on everything. Be it 60/40, 65/35 or 70/30.

As in you pay 70% of the deposit, 70% of the mortgage, 70% of the repair costs. She pays 30% of the deposit, 30% of the mortgage and 30% of the repair costs.

That way if it falls apart. When you sell the house she gets 30% of whatever is left over and you get 70%.

Bare in mind if you get married and then it falls apart. Her 30% share rises to 50% even though she has only paid for 30% and your 70% share decreases to 50% even though you have paid for 70%.