Unmarried home ownership, joining his preexisting purchase

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portlandor
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Unmarried home ownership, joining his preexisting purchase

Post by portlandor »

My partner and I (mid-30s) are co-habiting and have been living together for a year and a half in the house he owns partially and is paying on. We’ve talked about marriage but it's not on the calendar as of yet. We have a child each (ages 15 and 11) from previous marriages.

He’s inviting me to join in on the house at 35% investment. I have cash in savings for this amount.

The current plan is for me to forward him my share of 35% prior to being added to the title-- this is to finish updates on the house followed by a reappraisal and cash-back refinance. For this, I need to get a contract for this to cover any unlikely circumstance (i.e. he dies and I have to convince his mother/daughter (his current heirs) that I paid him). The contract is his idea-- As I type this out, I just realized I don't know why he doesn't offer to add me to the title after I transfer the cash but before the cash-back. . .

I'll receive 35% percentage of the cash-back. This would be going directly into a high-interest savings account - in the future, I'd have the option buy the 15% to join at 50% when my monthly income can meet the monthly mortgage amount.We've also discussed the potential scenario of a split- the plan would be to sell the house and split it at 65/35 (or 50/50 in the future).

My current questions, after reading other posts with similar circumstances as mine:

1. How to create an interim financial contract for my 35% before I'm added to the the real estate deed?
2. What do I need to do legally when I put 35% down on the house?
3. Should my name be on the home mortgage?
4. Can we do these contracts on our own with a notary or through Nolo?
3. What other questions should I be asking now? This is my first house purchase.

His income: $150K
His debt: 35K plus remainder of mortgage
His asset: House valued at $480K, anticipated to increase after reappraisal, he owns about 50K

My income: $24K, will be 50K when I finish school
My debt: $0
My assets: $20K in a Roth IRA & $26K in a high-interest CD. (From inheritance).
My monthly spend: $1400/month to him for expenses, i.e. “rent”/bills/food. I cover my grad school bill, car insurance, phone, clothes, and travel.
Assets I can liquidate to increase my down payment: Two gold ounces (3K) an old stock holding (5k) and a car (5K).
Potential addition to down payment: $13K

Any additional advice aside from questions is welcome.
mhalley
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Re: Unmarried home ownership, joining his preexisting purchase

Post by mhalley »

I think you need a real estate lawyer (and a new boyfriend). Maybe I’m old fashioned, but I don’t think 2 people that aren’t married should own a home together, it gets way too complicated should you break up. In a divorce there are clear guidelines.
https://www.huffpost.com/entry/buying-a ... 3f77dc6c1c
Last edited by mhalley on Tue Mar 10, 2020 6:31 pm, edited 1 time in total.
Nummerkins
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Nummerkins »

Just pay rent and be done with it. Sounds like a gigantic headache.
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Raymond
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Raymond »

What does "he owns partially" mean? Is there another person on the deed/mortgage, or did you just mean that he has some equity in the house?

This sounds way too complicated, just pay rent as suggested above.

[Edit] I wouldn't say that I smell a rat, but there's a whiff of Mus musculus.
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averagedude
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Re: Unmarried home ownership, joining his preexisting purchase

Post by averagedude »

I would continue just paying rent. This makes it less complicated in case things go south. If he puts pressure on you to purchase equity in his home, these two statements come to my mind.
1. "poop or get off of the pot"
2. "better put a ring on it".
fru-gal
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Re: Unmarried home ownership, joining his preexisting purchase

Post by fru-gal »

I wouldn't touch this. It sounds like a real potential mess. So many things could go wrong.
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cchrissyy
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Re: Unmarried home ownership, joining his preexisting purchase

Post by cchrissyy »

you have a kid and not very much assets or income. I think it would be a HUGE mistake to tie up the only money you have into a house, especially one where you don't have 100% control.
it's safer and smarter to just rent.
pasadena
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Re: Unmarried home ownership, joining his preexisting purchase

Post by pasadena »

Reading this set off a number of alarms in my head. I get that he asks for a contract - which silenced a few of the alarms, but as someone said above, it still doesn't sound quite right. Also your explanation isn't super clear to me. 35% of *what*? Sounds like you also got one of these alarms - why not put you on the title right away, for your part?

Getting into real estate without being married can lead to huge headaches, especially in a situation where you're not both owners and participants at the same rate. You have zero protection, unlike you would in a divorce. Many, many things could go wrong here, and you're the one starting with a handicap.

You're thinking of tying up *all of your assets* in what is basically somebody else's home, to pay for remodeling.

Keep paying the rent and your part of the running costs of living there. Focus on increasing your savings, for you and your child.

Then when you do get married, rethink the home situation if you want.
junior
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Re: Unmarried home ownership, joining his preexisting purchase

Post by junior »

This sounds *way* too complicated and under the circumstances it doesn't sound particularly romantic either. You really want to hire a lawyer to work on this when you only make 24k a year? You should pass on this.
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ResearchMed
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Re: Unmarried home ownership, joining his preexisting purchase

Post by ResearchMed »

And yes, what does "owns partially" mean?

If it is anything other than "the mortgage lender owns the rest", then do not go near this financial arrangement!

RM
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JGoneRiding
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Re: Unmarried home ownership, joining his preexisting purchase

Post by JGoneRiding »

Why is your rent so high? To me it sounds like your bf is getting way touch from you considering your current descrpency in income

You should pay market rate for a room NOT half of his expenses. He choice the house and controls the utilities. For my area that is $500 per month includes all utilities.

Go on craigslist and Zillow determine what a room rental would cost, pay him that. Doesn't matter st all that this is nicer bigger house etc
ballons
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Re: Unmarried home ownership, joining his preexisting purchase

Post by ballons »

portlandor wrote: Tue Mar 10, 2020 1:20 pm My partner and I (mid-30s) are co-habiting and have been living together for a year and a half in the house he owns partially and is paying on. We’ve talked about marriage but it's not on the calendar as of yet. We have a child each (ages 15 and 11) from previous marriages.

He’s inviting me to join in on the house at 35% investment. I have cash in savings for this amount.

The current plan is for me to forward him my share of 35% prior to being added to the title-- this is to finish updates on the house followed by a reappraisal and cash-back refinance. For this, I need to get a contract for this to cover any unlikely circumstance (i.e. he dies and I have to convince his mother/daughter (his current heirs) that I paid him). The contract is his idea-- As I type this out, I just realized I don't know why he doesn't offer to add me to the title after I transfer the cash but before the cash-back. . .
Red flags all over the place. You even question why this doesn't feel right. Your rent seems really high to be paying someone who doesn't even own the house outright.

I would start looking for another place to live.
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StevieG72
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Re: Unmarried home ownership, joining his preexisting purchase

Post by StevieG72 »

Horrible idea.

If you are not ready to get married, you are not ready to own a home together. If you are helping out with bills / mortgage payment just think of it as rent. If you get married in the future this whole complicated transaction would have been an exercise in futility. If you don't get married and split up you will be glad you are not tied to the home! It is easy to say "yeah if we split up we just sell the house and split 65/35", however it will be much more complicated if that happens!

Really nothing good to come from the transaction. Why would you want to do a cash out refinance? You are putting in 35% of the homes value, then the plan is to do a cash out refinance and you get 35% of that? At arms length it sounds like your BF needs money and you are helping facilitate improvements for a cash out refinance. Using a home like an ATM is NEVER a good idea in my opinion, it should be a red flag to not combine finances! What in the world makes you think this is a good idea? Just don't do it!

Keep the money you have, invest in the stock market! Stocks are on sale big time!
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StevieG72
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Re: Unmarried home ownership, joining his preexisting purchase

Post by StevieG72 »

StevieG72 wrote: Tue Mar 10, 2020 8:09 pm Horrible idea.

If you are not ready to get married, you are not ready to own a home together. If you are helping out with bills / mortgage payment just think of it as rent. If you get married in the future this whole complicated transaction would have been an exercise in futility. If you don't get married and split up you will be glad you are not tied to the home! It is easy to say "yeah if we split up we just sell the house and split 65/35", however it will be much more complicated if that happens!

Really nothing good to come from the transaction. Why would you want to do a cash out refinance? You are putting in 35% of the homes value, then the plan is to do a cash out refinance and you get 35% of that? At arms length it sounds like your BF needs money and you are helping facilitate improvements for a cash out refinance. Using a home like an ATM is NEVER a good idea in my opinion, it should be a red flag to not combine finances! What in the world makes you think this is a good idea? Just don't do it!

Keep the money you have, invest in the stock market! Stocks are on sale big time!
Edit to add WOW just saw your expenses. I think this guy is being unfair with splitting expenses with you, definitely a bad idea to put money in the house. You have limited assets, don't tie them up with this guy. You make 24k and pay $1400 a month?!!?! He is house poor and you are subsidizing, stop the madness!
Fools think their own way is right, but the wise listen to others.
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Watty
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Watty »

portlandor wrote: Tue Mar 10, 2020 1:20 pm Any additional advice aside from questions is welcome.
To do this right you would need to each have a lawyer to work out the agreements and make sure all the paperwork is in order to handle all the unplanned things that can happen.

It would be good to also get some tax advice so there are not any unexpected tax bills. For example my understanding(which is not worth much) is that you can't just choose who gets to deduct any property taxes and mortage interest. I as I recall you need to need to split those based on your home ownership percentages.

That would be a lot of legal fees and work to get that setup when you will just need to redo it all in the near future if you get married since you would likely want some sort of prenuptial agreement.

If you are not going to get married in the near future then combining your finances is asking for problems.

I would wait until you get married.

portlandor wrote: Tue Mar 10, 2020 1:20 pm My monthly spend: $1400/month to him for expenses, i.e. “rent”/bills/food.
No matter what you call it you are paying him rent. I would assume that would be taxable income for him that he should have been declaring it on his taxes. He should also make sure that his insurance company is Ok with the rent situation.
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Nate79
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Nate79 »

Danger danger danger. No way would I touch this with a 10 foot pole.
Freetime76
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Freetime76 »

ballons wrote: Tue Mar 10, 2020 8:07 pm
portlandor wrote: Tue Mar 10, 2020 1:20 pm My partner and I (mid-30s) are co-habiting and have been living together for a year and a half in the house he owns partially and is paying on. We’ve talked about marriage but it's not on the calendar as of yet. We have a child each (ages 15 and 11) from previous marriages.

He’s inviting me to join in on the house at 35% investment. I have cash in savings for this amount.

The current plan is for me to forward him my share of 35% prior to being added to the title-- this is to finish updates on the house followed by a reappraisal and cash-back refinance. For this, I need to get a contract for this to cover any unlikely circumstance (i.e. he dies and I have to convince his mother/daughter (his current heirs) that I paid him). The contract is his idea-- As I type this out, I just realized I don't know why he doesn't offer to add me to the title after I transfer the cash but before the cash-back. . .
Red flags all over the place. You even question why this doesn't feel right. Your rent seems really high to be paying someone who doesn't even own the house outright.

I would start looking for another place to live.
So, let me see if I got this right...basically he’s offered you a share in his real estate investment to be developed with your money and somehow you get cash back, too? :annoyed . Is he perhaps a hedge fund manager? :oops:

Hearing this, as a woman, I’d say no thank you and probably look at moving out...this is not a joint venture. Bizarre scheme. Not sure if your boyfriend is a numbers game person, looking to Cash in and get a remodel, just a really misguided guy, or a guy to dump like last weeks’ leftovers (trying to be funny). This is a horrible, horrible, idea! No way should you do this arrangement. You have a huge income gap, and you’re still in school. I wouldn’t even do this in an engagement or marriage scenario ...because - duh - you’d be married and have No Reason to buy into a spouse’s house. Is he trying to protect you? Tell him to get term life and put you and kids down as beneficiaries.

Here are a few of the red flags:
1. Waaaaaaay too complicated. I can’t even make sense of it. I am a smart person.
2. It’s your boyfriend- what is the advantage to you? Hint: there is none.
3. Why use the cash for a remodel? Can he not save and pay for it with his income? (Rhetorical question)
4. Multiple names will be on the title in a non-spousal relationship...and he’s already bringing up his family as involved.
5. As said previously, you have none of the legal protections or benefits of a spouse should something happen to him or this relationship. Think:disability, social security, divorce, death. Cohabitation is a whole other beast, even with the best of intentions.
6.IMO - You need your savings. You might be living together, but technically you have the lesser financial cards, and ***you have a child***.
7. You might become “part owner”, but what about upkeep on this house or legal fees if something happens to him. See #5.

I apologize for sounding scattered- I’m sputtering a bit over this, shall we say, proposal.
mhalley
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Re: Unmarried home ownership, joining his preexisting purchase

Post by mhalley »

I was concerned my post about getting a new boyfriend was too harsh, seeing the other posts makes me realize I wasn’t harsh enough. You should be splitting expenses based on income, not 50/50.
Freetime76
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Freetime76 »

P.S. Just thought of this: so, he takes your cash, and there’s this other contract? Or is it he adds you to the deed, and so you must go on the loan as well.

Because he doesn’t actually OWN this house. I don’t see how a contract is going to supersede those documents... how can he “sell you” a share of a house where a mortgage company has first dibs of putting a lien on the houseshould he lose his job and not pay. Somebody help explain, I know I’m not using the right terms.... :?:

Do you, with a 50K income after school is done, really want to be on the hook for the loan on a $480K house? No way.
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F150HD
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Re: Unmarried home ownership, joining his preexisting purchase

Post by F150HD »

Raymond wrote: Tue Mar 10, 2020 6:36 pm What does "he owns partially" mean? Is there another person on the deed/mortgage, or did you just mean that he has some equity in the house?

This sounds way too complicated, just pay rent as suggested above.
+1000

quite unclear what 'owns partially' means....
anon3838
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Re: Unmarried home ownership, joining his preexisting purchase

Post by anon3838 »

If it were me, I would keep things as-is. I agree with all the other posters that this sounds messy, with the potential for even more mess.

If you do go through with this, you want a solid Joint Tenancy In Common agreement that’s lays out your investment and agreement in the legal document about how you get your money back + appreciation on the property.

Still messy tho, cuz a million things can go wrong. What if relationship sours and you want out, but he’s not willing to give you your money back. That’s just one of many scenarios.


EDIT- it’ll be on you to enforce the agreement if the need arises.
Last edited by anon3838 on Tue Mar 10, 2020 9:44 pm, edited 1 time in total.
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MP123
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Re: Unmarried home ownership, joining his preexisting purchase

Post by MP123 »

So, from what I can understand he has $50k equity in this house and wants to sell you 35% of that pending a cash out refi that you'll get 35% of? And you won't be on the title.

What could go wrong? :twisted:

Run, don't walk.
Saving$
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Saving$ »

It is not a good idea, especially for you. The downside is all on you, the upside all on him.

Probably a good idea to listen to those advising against this, mostly because there is no upside to you since
- a. If you get married, whatever upside there might be will still be yours at that time
- b. If you don't get married, you have avoided the definite downside

Unlike the other posters, and depending upon where you live, I think $1400/month as your share of household expenses for you and your child could be reasonable and fair. In my area one bedroom apartments rent for $1000/month, plus utilities. Your $1400 includes household expenses, and presumably your child gets a room separate from the adults, which a one bedroom does not offer and it also presumably includes food. So seems fair enough - you get a better living situation than a one bedroom, and overall it costs you less.
Saving$
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Saving$ »

It is not a good idea, especially for you. The downside is all on you, the upside all on him.

Probably a good idea to listen to those advising against this, mostly because there is no upside to you since
- a. If you get married, whatever upside there might be will still be yours at that time
- b. If you don't get married, you have avoided the definite downside

Unlike the other posters, and depending upon where you live, I think $1400/month as your share of household expenses for you and your child to cover "rent" utilities and food could be reasonable and fair. In my area one bedroom apartments rent for $1000/month, plus utilities. Your $1400 includes household expenses, and presumably your child gets a room separate from the adults, which a one bedroom does not offer and it also presumably includes food. So seems fair enough - you get a better living situation than a one bedroom, and overall it costs you less.
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gr7070
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Re: Unmarried home ownership, joining his preexisting purchase

Post by gr7070 »

Wow! A Bogleheads record!

First ever 25+ post thread with a unanimous sentiment. Whole life and timeshares have more diverse opinions.

I will not be a dissenting voice.
Iridium
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Iridium »

portlandor wrote: Tue Mar 10, 2020 1:20 pm For this, I need to get a contract for this to cover any unlikely circumstance (i.e. he dies and I have to convince his mother/daughter (his current heirs) that I paid him). The contract is his idea-- As I type this out, I just realized I don't know why he doesn't offer to add me to the title after I transfer the cash but before the cash-back. . .
I don't believe he can make any changes to the title while the mortgage lien is on it, without the permission of the bank. Since he is planning on refinancing anyway, it is considerably easier to just take care of the title change at the same time.

Let me see if I understand the underlying reasoning of this complicated arrangement: there is a desire to make roughly $15K of renovations to the house. As your partner does not have the money, the plan is for you to chip in, in return for partial ownership of the house. You would get part of your money back after the refinance. The idea being that the greater value from the renovation would help get a larger loan. 35% of the property is only known to be worth $17.5K, so I am not seeing where/why you would need to liquidate any assets other than dip into the savings account.

Okay...I guess I can sort of see it. You aren't doing enough to get a true construction loan, and there is a timing issue with the cash refinance, in that you can't borrow against the increase in the value of the property from doing the renovations.

Let me propose something WAY simpler: lend him the money to do the renovations. If his finances are as bad as you portray, consider making the note a second lien on the property. When he goes to refinance, your loan would be paid off. Or, I suppose you could convert the debt into a tenant in common at the same time the title gets updated for the loan. The primary mortgage means he has limited ability to transfer his ownership interest to you, so straight debt is a lot easier. It is also a heck of a lot easier to unwind.

That being said there are a couple of problems with this:

1. Renovations never increase the value of the house as much as they cost. So, if you were to do what was proposed, 15K of renovations drive 7.5K of value, 80% of which would be mortgaged, and you would collect 35% of that, $2.1K of your original $15K. So, the payback with the cash out doesn't work. You are primarily buying partial interest in a house, there is no free lunch that leaves you with most of your cash and part of the house. The house would have to be worth way more than $480K today. Which I suppose is possible, but then it would seem like a traditional HELOC would be a better choice, no reason for such a complicated arrangement.

2. The plan to sell the house if the relationship ends means that the difference between cost of the renovations and increase in value goes poof. Relationship last three more years? The two of you effectively paid $2.5K/year to enjoy the renovations. At least your portion would would only be 35% of that.

3. Your partner's finances are screwed up. Earning $150K, net worth of $15K in his mid-thirties, house mortgage of 90% loan to value, and no retirement savings. Look, I don't blame the guy, divorce is absolute hell on one's finances and I'll bet that housing cost is eating him alive even with you helping out. However, right now, based on what has been written, he is near a financial emergency. BTW, at the moment, your finances aren't looking great either, but that should change once you graduate. With your income and his assets, I am sorry to say that spending on renovating the home is highly counter indicated. And it is really inadvisable for either of you to tie your finances together because, he looks to be a single paycheck away from not being able to pay his bills and your ability to take on extra expenses is virtually non-existent.
fru-gal
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Re: Unmarried home ownership, joining his preexisting purchase

Post by fru-gal »

Iridium wrote: Tue Mar 10, 2020 11:15 pm
Let me propose something WAY simpler: lend him the money to do the renovations.
...
And it is really inadvisable for either of you to tie your finances together because, he looks to be a single paycheck away from not being able to pay his bills and your ability to take on extra expenses is virtually non-existent.
Do not lend him money. He is a big financial risk and you can't afford to lose a dime, let alone get into some legal mess.
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celia
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Re: Unmarried home ownership, joining his preexisting purchase

Post by celia »

This shows too many red flags. Before you know it, you will be stuck paying his mortgage since he apparently can’t.

Also a marriage at this time would be like stepping into a financial land mine. Don’t even consider it until both of your finances can be simplified and you understand all the expenses and debt and together can pay them every month.
Edward Joseph
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Edward Joseph »

I’ve cohabitated with a significant other before. I owned the place while she paid me “rent”. As others suggested DO NOT legally tie yourself to this without being married. In my situation, she was legally a tenant and paid me about 1/3 the rent what she would pay on her own place. Plus, we split the utilities. It is so much simpler this way.

Let him use the rent payments he pays you to handle his own renovations.
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N1CKV
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Re: Unmarried home ownership, joining his preexisting purchase

Post by N1CKV »

averagedude wrote: Tue Mar 10, 2020 7:09 pm I would continue just paying rent. This makes it less complicated in case things go south. If he puts pressure on you to purchase equity in his home, these two statements come to my mind.
1. "poop or get off of the pot"
2. "better put a ring on it".
I agree 100%

I am a guy that owned a house, girlfriend moved in, and now (many years later) we are married. She paid below market rent several years and shortly after marriage she stopped paying and about a year later I paid the house off. I never asked her for anything beyond that to keep everything clear to all involved.
GeoffD
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Re: Unmarried home ownership, joining his preexisting purchase

Post by GeoffD »

mhalley wrote: Tue Mar 10, 2020 8:45 pm I was concerned my post about getting a new boyfriend was too harsh, seeing the other posts makes me realize I wasn’t harsh enough. You should be splitting expenses based on income, not 50/50.
Yep. I’m People’s Republic of Relationships. $1,400 on that income? Upgrade boyfriends. What you wrote about his debt is also concerning. Is that maxed credit cards, loans for toys, and a big car loan? You don’t want his spending to bleed you dry.
daheld
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Re: Unmarried home ownership, joining his preexisting purchase

Post by daheld »

This is a monumentally, phenomenally terrible idea.
ljb1234
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Re: Unmarried home ownership, joining his preexisting purchase

Post by ljb1234 »

Don't do it. Pay rent if you must. Run, don't walk away from this "contract".
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Tamarind
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Tamarind »

In my case, I was the person who owned the house. My gf wanted to move in and I wanted to stop having roommates, so she paid me rent for a while. As my income went up, the rent quickly dropped below market, and eventually I suggested the money was better spent on her 401k.

After we got married I put her on the deed (a gift, no money exchanged) and we refinanced together so we both had skin in the mortgage. I was a bit anxious about it (there's a thread where the good people of BH talk me down from a prenup over $70k in home equity :oops: ) but it was not that much equity in the big picture.

Since you are making less right now, have a kid to worry about, etc, I don't think it's in your best interest to sink a bunch of cash into a house just yet. If he wants you to pay rent, negotiate a fair amount. Generally I think that spouses should share real property, both the ownership and the debt, equally.

I'm very glad he's not trying to get you to pay in without a contract... But it's a yellow flag to me that he might have your money even for a moment and you not be on the deed. If you do decide to proceed, please get your own lawyer.
DarkHelmetII
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Re: Unmarried home ownership, joining his preexisting purchase

Post by DarkHelmetII »

Nummerkins wrote: Tue Mar 10, 2020 6:30 pm Just pay rent and be done with it. Sounds like a gigantic headache.
+1
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portlandor
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Re: Unmarried home ownership, joining his preexisting purchase

Post by portlandor »

To “partially own”? I am referring to the fact that the bank owns most of the house. It sounds like there is another way to say this.

The most common comment is that partial ownership while unmarried is too complicated & it’ll take time to unwind. While that’s very Boglehead of you, I’m one to ride the wave it takes to get a net positive result. In Portland’s neighborhoods, especially in my area, prices have increased a lot. It was purchased in 2016 for $380K.

A bit of history- He purchased joint in 2016 with his now ex-wife. She moved out a little over two years ago and he bought her half. She gained several thousand (not sure the amount) on the reappraisal post-divorce- a 100K increase in two years. He gave her an extra $5K because she was apparently telling negative things about him to his network of friends. It was a big challenge for him financially, while things re-calibrated in his life. So over time, yes, the house mortgage has been a definite strain for him. He was happy when I moved in a year and a half ago and offered to help him “pay on the mortgage”. Over time he has re-framed this as “bills and food”. My daughter gets her own bedroom, occasional clothing purchases, and we spend a lot on food each month. The amount these total to haven’t been quantified.

The renovations are going to add value to the house- he’s adding a bathroom and converting the garage into increased footage of living space.

StevieG72- “If you don't get married and split up you will be glad you are not tied to the home! It is easy to say "yeah if we split up we just sell the house and split 65/35", however it will be much more complicated if that happens!”

How will it be more complicated?

He strongly suggested I use my cash back for my increased payments to him each month - roughly $1900. I’m hearing you all loud and clear that I’m paying a lot based on my relative income, and that his spending is excessive. Overall I pay less than I’d pay as a single person, it wouldn’t be the case with a mortgage. I’m also in charge of all the cooking, cleaning, laundry, and most of the errands. I’m also definitely hearing that some of you as homeowners asked your partner to pay far below market rent as contribution to the household.

Marriage- it’s something I want and he knows that. Yes, I could hold that I want the joint ownership after we are married. I can mention the legal fees and work to get it set up, when we will need to redo it in the near future if we get married (for prenuptial agreement). Plus legal protections of a spouse regarding disability, social security, divorce, death.

Term life- something we’ve talked about and he is open to. He said I should pay for this. For upkeep on this house or legal fees if something happens to him. Would term life be appropriate without a marriage or joint home ownership? I think it is since we have kids and we are living "as" married.

Overall I agree with many of the comments, and I'm considering showing him this thread.
Last edited by portlandor on Wed Mar 11, 2020 10:06 am, edited 2 times in total.
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Sandtrap
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Sandtrap »

This is one very unique way of looking at things for a man and a woman in the distant past.

You = "she"
Him, boyfriend, person who courts = "he"

You should not have to pay anything.
You and your child should be able to walk away at any time for any reason without strings.
You would need all of your money to get a fresh start if things turn South.
You should feel protected and "taken care of".
You should feel like a proper damsel and princess.

He should be your "Knight in Shining Armor".
He should be chivalrous.
He should be generous.
He should be protective.
He should open the carriage door for you.
He should carry an umbrella to shield you from the rain.
He should pay the bill to dine at the inn.
He should pay all the expenses of the castle he owns.
In return solely for your loyalty and love.

This is not a "business" relationship, shouldn't be.

Consider another Knight and Castle.

*A million plus ways of looking at these things with double that number of opinions.

j :happy
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sd323232
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Re: Unmarried home ownership, joining his preexisting purchase

Post by sd323232 »

OP, that's an immediate mission abort, NO, NO,NO. But it looks like you already made up your mind. Dont do it
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ResearchMed
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Re: Unmarried home ownership, joining his preexisting purchase

Post by ResearchMed »

portlandor wrote: Wed Mar 11, 2020 9:53 am To “partially own”? I am referring to the fact that the bank owns most of the house. It sounds like there is another way to say this.

RM: HE owns the house. HIS name is on the title. He borrowed money from the bank to buy it, so they have the house as collateral.
Or... he could have paid cash for the house, and it would be fully owned by him, with his name on the title. And then he may have borrowed a nice sum for a vacation home, a trip, college costs, etc. In that case, his lender would likely have some backup collateral, which could be the house. Note that this ends up the same way, except that at the start, before the financing, HE owned the house. He still does. His name is still on the title. And again, he owes money, and the house is the collateral.
[Note: There *are* some arrangements where the lender, even a bank, IS more of a "co-owner", and they'd get a specified amount or proportion of any selling price. With a mortgage, it's simple: Sell the house, pay off any of the remaining loan. That is ALL the lender is entitled to.]


<snip>

StevieG72- “If you don't get married and split up you will be glad you are not tied to the home! It is easy to say "yeah if we split up we just sell the house and split 65/35", however it will be much more complicated if that happens!”

How will it be more complicated?

RM: Let me try: Suppose, for one example, that the stress of all of this ends up with it all ending in a year. Okay,
Do you REALLY "deserve" 35% of the house value (or sales proceeds, but will he actually sell it if you move out?) because you contributed a relatively small amount for just one year, compared with his contributing much more, and for much longer?
IF you were just buying a house together *now*, and you each contributed cash in a 35/65 ratio, AND each paid all housing costs in that ratio, THEN the split when you sell it would reasonably follow that, be it in 1 year or 25.
There can be variations on this, in almost infinite ways, but those are what can pay for a lot of attorneys' fees up front. OR, that money could pay for attorneys' fees and court costs in the end.
The fact that you can't understand how complicated this could get is a very bad sign about what you are considering getting yourself into.

<snip>

I'm considering showing him this thread.
RM
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portlandor
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Re: Unmarried home ownership, joining his preexisting purchase

Post by portlandor »

To be clear, I haven't made up my mind yet- I'm more 20 yes/80 no. I appreciate how you're almost all emphasizing marriage first.

I understand and agree with the conservative perspectives- many good points. The 20 percent is coming from the part of me saying, "A split won't be unbearably complicated for a net positive outcome", and that's what I want to debunk. ResearchMed, thanks for speaking to that.
Last edited by portlandor on Wed Mar 11, 2020 10:54 am, edited 1 time in total.
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BL
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Re: Unmarried home ownership, joining his preexisting purchase

Post by BL »

I would suggest leaving things as is for now. Complications of mixing assets, responsibilities for your child, and lack of income to afford a home right now should be reason enough.

You need to consider retirement accounts, emergency funds, down payment savings account, your education, job applications and the like, and avoid real estate for the time being. Time to get your life in order first.

If his house is too much for him to handle, then he needs to address that himself.

I wish you both well. Take your time to make any more changes.
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Re: Unmarried home ownership, joining his preexisting purchase

Post by masha12 »

He makes more than 6 times what you make.

He charges you 70% of your income for rent.

You do all the cooking, laundry and laundry.

You want marriage and he is stalling.

Conclusion: You are a live-in housekeeper with benefits who actually pays him (instead of him paying you for your work) for the “privilege” of serving him.

Would you sign up for this situation if you weren’t romantically involved? Would you move in with a friend and pay 70% of you income in rent and assume all the household chores?

As my mother once told me when I asked her about dating and marriage, “Eventually, you get married or you break up.” If he isn’t ready for marriage, stop wasting your time with him.

You can’t make it on your own? Well, think about what you would have to do if he died today. You would get nothing and would be kicked to the curb as soon as his family could legally get you out.

You deserve better. Your child deserves better.
PrinceAli132
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Re: Unmarried home ownership, joining his preexisting purchase

Post by PrinceAli132 »

portlandor wrote: Tue Mar 10, 2020 1:20 pm My monthly spend: $1400/month to him for expenses, i.e. “rent”/bills/food. I cover my grad school bill, car insurance, phone, clothes, and travel.
portlandor wrote: Wed Mar 11, 2020 9:53 am He strongly suggested I use my cash back for my increased payments to him each month - roughly $1900. I’m hearing you all loud and clear that I’m paying a lot based on my relative income, and that his spending is excessive. Overall I pay less than I’d pay as a single person, it wouldn’t be the case with a mortgage. I’m also in charge of all the cooking, cleaning, laundry, and most of the errands. I’m also definitely hearing that some of you as homeowners asked your partner to pay far below market rent as contribution to the household.
  • Currently you are contributing $1.4K a month for rent/food/utilities.
  • You are considering liquidating your savings to get a 35% stake in the house which the funds will be used to complete some renovations/remodel. The house will then be reappraised for a cash-back refinance where you will receive 35% of the cash back.
  • With your stake in cash he suggested you pay more towards rent/food/utilities? Why? :confused
  • On top of that you are in charge of cooking, cleaning, laundry and most errands? How is this fair?
  • I would consider what a shared room or two costs in the same area and that should cover your rent and utilities. Track the food and household expenses and split fairly/evenly. If you are willing to assume the bulk of responsibility for cooking, cleaning, and etc. that is one thing. From my experience if one person is doing most of those tasks then they contribute less towards shared costs.
Edit - checking to make sure you have appropriate (renter's?) insurance since you may not be covered under his insurance.
portlandor wrote: Wed Mar 11, 2020 9:53 am
Term life- something we’ve talked about and he is open to. He said I should pay for this. For upkeep on this house or legal fees if something happens to him. Would term life be appropriate without a marriage or joint home ownership? I think it is since we have kids and we are living "as" married.
  • Why is he expecting you to continue to pay more when you are already spending all of your current income?
  • Something doesn't seem appropriate with his finances and his expectations of your contributions.
  • Were finances a reason his prior relationship didn't work out? This may be worth knowing before committing to a relationship with this person.
Last edited by PrinceAli132 on Wed Mar 11, 2020 11:34 am, edited 4 times in total.
dru808
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Re: Unmarried home ownership, joining his preexisting purchase

Post by dru808 »

Very sketchy. I’d digress to Dave Ramsey on this issue.
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crake
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Re: Unmarried home ownership, joining his preexisting purchase

Post by crake »

This is a complicated transaction and it sounds like you two don't have all the number quite worked out yet.

What do you mean by giving him 35%? 35% of what? 35% of the equity he already has in the house? 35% of the value of the house? 35% of the remaining mortgage? 35% of future expenses? 35% of the renovation cost? Will you also be taking on 35% of the debt?

I would also question your assumption that you will come out ahead in this even if it is more work. The renovations are very unlikely to increase the value of the house more than they cost. If you put 50k into the house it might only appraise for 25k more. I would question the need to renovate a house when it sounds like there is already some struggle to pay the mortgage. It also seems like you are looking to get the house reappraised and doing a cash out refinance. That will increase the monthly cost of the mortgage. Refinancing also costs money. My guess is it could take years to benefit from this transaction.

I would think of it this way. If you get married in a couple of years it won't matter what you did today. The house will be both of yours and any money you paid in rent will be both of yours. If you split up instead of getting married you will be in a much better place if you didn't execute this real estate agreement. The attorneys and real estate fees alone will cost way more than you could ever have hopped to benefit from being on the deed.
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Re: Unmarried home ownership, joining his preexisting purchase

Post by Sandtrap »

masha12 wrote: Wed Mar 11, 2020 10:56 am He makes more than 6 times what you make.

He charges you 70% of your income for rent.

You do all the cooking, laundry and laundry.

You want marriage and he is stalling.

Conclusion: You are a live-in housekeeper with benefits who actually pays him (instead of him paying you for your work) for the “privilege” of serving him.

Would you sign up for this situation if you weren’t romantically involved? Would you move in with a friend and pay 70% of you income in rent and assume all the household chores?

As my mother once told me when I asked her about dating and marriage, “Eventually, you get married or you break up.” If he isn’t ready for marriage, stop wasting your time with him.

You can’t make it on your own? Well, think about what you would have to do if he died today. You would get nothing and would be kicked to the curb as soon as his family could legally get you out.

You deserve better. Your child deserves better.
+1 million
These should be the only "reality check" elephants in the room.

Other smaller elephants; justifications, compromises, bargaining, convincing, promising, and other "-ings".

Actionably: financial concerns and manipulations are secondary to the larger issues that cannot be quantified.

Often: what is truly important or should be cannot be entered on a spreadsheet.

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Re: Unmarried home ownership, joining his preexisting purchase

Post by David Jay »

portlandor wrote: Wed Mar 11, 2020 10:30 amI appreciate how you're almost all emphasizing marriage first.
This is not a moral commentary, it is a legal issue. Under the law, you are either married or single.

If you are single, you don’t want to get into deals that put the control of your assets in someone else’s hands. Pay rent as long as you are single. Make all investments away from your relationships (this continues through life - don’t invest with coworkers, family members, friends, etc.).
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HettyGreenIsMyHero
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Re: Unmarried home ownership, joining his preexisting purchase

Post by HettyGreenIsMyHero »

Oh my...how long have you two been together? I just can't imagine having to contribute that much $ per month on a low income & in school with a significant other who makes $150K a year?! Rather be single I think.
Maybe I'm an old fashioned woman, but all this team split the rent stuff has not benefited us! My husband doesn't even like it when I pay for dinner...
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Re: Unmarried home ownership, joining his preexisting purchase

Post by 9-5 Suited »

Please don't do this.
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Re: Unmarried home ownership, joining his preexisting purchase

Post by junior »

Maybe your boyfriend needs to buy or rent a cheaper house and/or stop spending all this money on renovations?

It's clear he keeps asking for you to spend more because he's trying to keep up with the Joneses whether or not he can afford it.

Imagine a scenario where he has a house that costs $2000 a month, and you chip in $500 a month because you make 1/3 of his salary. You could both afford it! Wouldn't that be nice?
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