When faced with the question: marriage or mortgage? More and more couples are choosing to get on the property ladder before spending money on a wedding. According to research carried out by Halifax, 64% of 18 to 44-year-olds think that owning a home is more important than tying the knot.
However, there’s an elephant in the room: what happens if things don’t work out?
It’s really important to have this conversation before things go south (while, of course, hoping that they don’t!) and, ideally, before you start looking at properties together. Buying a home is a big commitment and you need to make sure that you’ll both be financially secure no matter what happens.
Being on the same page is key.
Before you start the home-buying process together, have a frank chat about your finances, priorities, and how you want to go about buying together: as joint owners or as tenants-in-common (we’ll explain what the difference is later).
You should have a good understanding of your partner’s financial situation before you take on any joint financial product with them, whether that’s a mortgage or even just opening a joint bank account. Once you’re financially linked, their credit score can affect yours so it’s important you know about any debt or credit issues up-front.
It’s also worth noting that you will have to include personal details (like how much money you make) on a joint mortgage application, so it’s a good idea to get comfortable talking about this beforehand.
Joint ownership means you both have equal rights to the property.
If you split up, one person would have to buy the other out and take on the whole mortgage, or you would both need to agree to sell the property and split the proceeds 50:50.
It also means that if one of you died (sorry to be so morbid) the other would inherit their share of the property.
This option means you each own a defined share of the property (eg a 70/30 split).
If one of you is contributing more money to the purchase (like a bigger share of the deposit) you might want to explore this route. You should also have a deed of trust drawn up by your solicitor, which explains who contributed what and how you will divide the proceeds if you split up or sell up.
If you buy as tenants-in-common, each person can leave their share of the property to whoever they want in their will. This can make things tricky if one partner passes away, and the other can’t afford to buy their share from the heir.
“Hope for the best, prepare for the worst” might not sound very romantic, but it’s important to agree on a plan - and get that plan in writing - in case things don’t work out.
Your solicitor can help you to reach a fair agreement and make sure that it is reflected in the deeds to the property.
If you already own a property with your partner and you want to make sure you’re both protected in case your relationship breaks down, you should speak to your solicitor. If you have a specific question about your mortgage, speak to a broker (like us!).
If you have concerns about your relationship and want to explore your options, there are some excellent resources available on Shelter’s website.
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