Taking out a mortgage

26
Posted 27th Jan
Hello




A quick question about mortgages. My daughter who is coming

up to 23 years of age wants to get on the housing ladder. She has at the moment

about £35000 in savings and no debt and earns about £24000 a year. She wants to

share the mortgage with her boyfriend who has zero savings as he has been doing

his paramedic degree for the past 4 years. His degree was paid for by the NHS

so has no student debt to pay off. He is now a fully qualified paramedic on

about £24000 a year which will rise to about £31000 after a couple of years so i have been told. Is it best to see a independent mortgage broker or stick

with her / their bank. Is one better than the other? I have told her that she

will need some sort of agreement regarding the deposit if they were to split

later in life and sell the property.




Any mortgage advice would be helpful in making the above

decision.




Thanks
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26 Comments
No advise on the mortgage but i take it your daughter and her boyfriend are already renting together? If not the likely outcome is going to be messy and costly. My advise would be for your daughter to buy the property herself but maybe that's just based on my own life choices and mistakes (lol).
He'll have to go halves on the deposite, and best get a joint account for all the bills
It's not necessary to get a mortgage with your bank, loyalty counts for nothing and she won't (normally) get a special rate for having an account with the bank. My advice is to shop around, and also see an independent broker (if only for the advice she'll be given).
From what you're suggesting, I'm assuming that the deposit will come solely from your daughter's savings. Personally, if it was my daughter I would suggest that she buys the house in her name. It will save on lots of grief & stress further down the line if they ever decide to split up.
Hi I was in a similar situation with my boyfriend. I had the savings for a house as he'd always rented whilst studying to be an airline pilot. 6 months of dating I purchased the house and mortgage solely in my name, he pays half of everything including the bills and mortgage. This is never going to be our forever home and works for us at the moment. I think your daughter would be wise doing as I did and taking it solely in her name incase of any splits of complications down the line. I saw an independent mortgage advisor and got the best rates this way.
Don't go to your bank they will probably try the hard sell.

Go to an independent broker (one that is free as they are paid commission on completion). They will give you best advice and find you the best rate.
Edited by: "delusion" 27th Jan
If depends what they want to do, and what they want to protect, how long they have been together, what their current living situation is like.

Are they throwing all their money in a pot and purchasing 50/50? I personally would speak to a solicitor and get a protection on your daughter's deposit should the worst happen.

I had similar performed when my wife (gf at the time) and I bought our first house. I had all the deposit and also earned more so we had something drawn up by a Solicitor to protected my deposit should we have to sell after a break up...thankfully we never needed it and we're married now so all bets are off!

I think they should buy together so they both see it as 'their' home but the deposit needs protection in some way, that's a great savings pot for a young'un!
Edited by: "darlodge" 27th Jan
interest rates are low atm.
house prices only tend to go up.
rent is money down the drain.

buying makes sense.
depending on their relationship, she can get a house on her own.
or if she is one putting deposit down, get in writing that she owns more % of house (equivalent of deposit given house price). and clause when one decides to sell that other person can buy them out or similar.
Personally based on my experience and what I've seen with others close to me, I wouldn't suggest she put the full deposit if the property is going to be in both names. That doesn't always end well.

My suggestion is that she goes to a broker (one like L&C Mortgages which is free to use) to get an idea of where she stands in terms of available mortgages and affordability. Once she knows where she stands, she can decide on where to look elsewhere for a mortgage or continue with that broker to find one (when I used them I found that the mortgage they recommended was available on the same terms through a bank but the broker was able to get me slightly more money and was less of a hassle. Also the bank was paying him commission of £1K but wouldn't have passed that on to me in any event even though I asked so I wasn't losing out).

If they see a future together, I'd suggest she gets the house in her name and they can live there together while they each save to go 50/50 on another house that they own together. This way they get the experience of living together (cause dating someone and being able to live with them are two really different things), avoid paying rent while they're saving, and in the end she will have an income generating property when they move (which they can use to pay off their mortgage more quickly).

On another note, big congrats to your daughter for being able to save so much at an early age.
ememm27/01/2020 11:15

Hi I was in a similar situation with my boyfriend. I had the savings for a …Hi I was in a similar situation with my boyfriend. I had the savings for a house as he'd always rented whilst studying to be an airline pilot. 6 months of dating I purchased the house and mortgage solely in my name, he pays half of everything including the bills and mortgage. This is never going to be our forever home and works for us at the moment. I think your daughter would be wise doing as I did and taking it solely in her name incase of any splits of complications down the line. I saw an independent mortgage advisor and got the best rates this way.


Whether the mortgage is solely in your name is irrelevant - if you've lived together for over a year you're a common law partnership and as such each party is entitled to half in any potential split.
Having recently purchased a property where my partner paid more of a deposit than myself, my partner and I made a deed saying that when the house is sold, she will get her deposit back and I will get my deposit back, we would then split any other monies left over 50:50. That's providing there is enough equity to cover the deposit we put down when it comes to selling

Could be a solution for your daughter
moob27/01/2020 13:13

Whether the mortgage is solely in your name is irrelevant - if you've …Whether the mortgage is solely in your name is irrelevant - if you've lived together for over a year you're a common law partnership and as such each party is entitled to half in any potential split.



You might want to recheck that because its not correct.
moob27/01/2020 13:13

Whether the mortgage is solely in your name is irrelevant - if you've …Whether the mortgage is solely in your name is irrelevant - if you've lived together for over a year you're a common law partnership and as such each party is entitled to half in any potential split.


What a load of cods wallop. Common law marriage is a myth. I saw a solicitor about it about 11 years ago. He told me a partners can pay bills, rent and have zero legal entitlement at all. However if they buy a permanent fixture fir the house ie a kitchen or bathroom suit then they have a vested financial interest in the property.

to the op. Take a look into buying the property as tenants in common rather than joint tenants. That way they can agree the percentage of the value each own. 60/40 etc.
Edited by: "Wadda" 27th Jan
As for who pays what, deposits etc, thats up to your daughter and her boyfriend. Maybe an agreement that if they do seperate then your daughter gets the deposit back first and any profits after that split equally. If within the first 5 or so years.

As for the mortgage, look online at 5 or 10 year fixed deals, as there are some good deals at present. That way they can budget for the future without the worry of hikes in the payments if the interest rates going up.
you can buy a property as tenants in common where you can specify the percentage held by each partner. so if your daughter is paying the deposit, then she can have a bigger percentage of the property ownership.

not unusual for a couple who is not married to buy a property together but of course the problem occur when they decide to split up as then the property has to be sold and the proceeds split, or one partner could buy the other partner out.

you don't need a broker unless you have problems getting a mortgage as the broker will charge fees. you can compare mortagage rates online with comparison sites. they don't have to use their existing bank for the mortgage but it often is easier to do so as they can see all your spending and income history and they already have all your details. but certainly compare their mortgage rates with others as it isn't that much more difficult to take out a mortgage with another bank. you just have to provide more details to them.
Edited by: "mutley1" 27th Jan
Simple maths, goto solicitor and get an agreement drawn up that your daughter gets % more out of the house equivalent to what 35,000£ would be...

so if house cost 100000 then 35000 deposit would mean your daughter would get 67.5% of the sale of house of course it all depends on how much the house costs...
Get a mortgage broker, they can advise you the best deals to look at and will do all the leg work for you. I ended up with a skipton deals which was far better than what we could find online.
Also when they do find some where and get the green light ask the solicitor to write a clause in where your daughter would be entitled to the first 35k and then all other proceeds to be spilt
Edited by: "ndyanem" 27th Jan
Not a good way to start off with a money issue.

Will the boyfrind pocket the extra £7k he is going to making in the future and have his and her money?.
Potential of him earning £175k in the 25 year mortgage term more then her and she is worried about a £35k deposit.
If the wages are going into a joint bank account to pay for everthing who cares who pays the deposit.

If she is more worried about the money then the relationship he is with the wrong person or is it you as the mother pushing for it.
markvirgo27/01/2020 19:41

Not a good way to start off with a money issue.Will the boyfrind pocket …Not a good way to start off with a money issue.Will the boyfrind pocket the extra £7k he is going to making in the future and have his and her money?.Potential of him earning £175k in the 25 year mortgage term more then her and she is worried about a £35k deposit.If the wages are going into a joint bank account to pay for everthing who cares who pays the deposit.If she is more worried about the money then the relationship he is with the wrong person or is it you as the mother pushing for it.


You have to protect yourself and your money, you can be in a relationship or marriage and keep your financial independence. Only a fool doesn't plan for the future.
Azwipe27/01/2020 21:22

You have to protect yourself and your money, you can be in a relationship …You have to protect yourself and your money, you can be in a relationship or marriage and keep your financial independence. Only a fool doesn't plan for the future.


Exactly. You always need a back up plan. You never know what is around the corner. Protect the 35k and see how things progress in the future.
Depending where you buying £35k might not be enough.
ememm27/01/2020 11:15

Hi I was in a similar situation with my boyfriend. I had the savings for a …Hi I was in a similar situation with my boyfriend. I had the savings for a house as he'd always rented whilst studying to be an airline pilot. 6 months of dating I purchased the house and mortgage solely in my name, he pays half of everything including the bills and mortgage. This is never going to be our forever home and works for us at the moment. I think your daughter would be wise doing as I did and taking it solely in her name incase of any splits of complications down the line. I saw an independent mortgage advisor and got the best rates this way.


If he is paying for half the mortgage and bills then he will have a valid claim to your house just because it is in your name doesn't mean that he can't take a claim to it, if he can prove it
moob27/01/2020 13:13

Whether the mortgage is solely in your name is irrelevant - if you've …Whether the mortgage is solely in your name is irrelevant - if you've lived together for over a year you're a common law partnership and as such each party is entitled to half in any potential split.


Not quite but you are partly correct, common law means nothing and every case is individual
Jaestar6927/01/2020 15:38

You might want to recheck that because its not correct.


Yeah, you're right, seems I am talking mince. Better get a ring on her finger I guess
Azwipe27/01/2020 21:22

You have to protect yourself and your money, you can be in a relationship …You have to protect yourself and your money, you can be in a relationship or marriage and keep your financial independence. Only a fool doesn't plan for the future.


and the future isn't always bright as we all know. only a fool will think everything will be ok and problems never arise.
even married couples split up, and divorce is extremely difficult in this country, let alone unmarried couples.
moob28/01/2020 14:14

Yeah, you're right, seems I am talking mince. Better get a ring on her …Yeah, you're right, seems I am talking mince. Better get a ring on her finger I guess


then you got other problems, lol
Why are people even bothering still? Op nowhere to be seen.
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