Owning your own home

I had a similar position previously. Less extreme salary gap and greater deposit. But we wouldn't have been able to buy the flat we were thinking of without both of us. (if only we had bought it!)

My better half is an excellent negotiator and put forward a strong case as to what her share should be. In the end we didn't buy at that time, but I remember thinking I might feel a bit hard done by.

Basically there are always two sides and I think it really comes down to the detail.

I'm not sure how helpful this is but...

senario 1
Property = £550k (strong property)
Deposit = £80k
Your salary = £80k
Her salary = £40k
Monthy costs = £2.5k

Here she'd be fine covering her half you're just enabling her securing the mortgage. It would be fair imo for you to have some skin in the game but you could look at it as you potentially gaining capital on a great investment whist enjoying a likely reduction in living costs.

senario 2
Property = £320k (less strong)
Deposit = £50k
Your salary = £45k
Her salary = £25k
Monthy costs = £2k

Here she may struggle to pay half the monthly costs. As well as needing you to purchase she may need you to subsidise her contributions. You are doing more than just facilitating and your total capital gain is likely to be lower.

Thanks! Scenario 2 is rather v. similar

ready to buy a house in the next 12 months or so

Also consider your deposit situation may change to > £5K
But would her ~15% also go up?

Then I'd echo dunc's points.

But it does also depend on monthly contributions.

It is a very hard thing to work through with someone you are in a relationship with tho. Also got to weigh up the relationship....

My "sell up and rent for a bi"t plan is well underway. It does however include us copping early repayment charges on the existing mortgage as without a new property to port it too, we're forced to pay it off early one year into a three year fixed deal.

This will sting a bit and also result in a chunk of change sat idle our crappy sub 1% savings account for between six months and a year. Can anyone recommend any decent financial products which might help claw back a bit of the ERC loss in that timescale?

You renting from her will make it more expensive for her:-

• Legal fees for tenancy agreements
  
• Only the first £7500/year of rent you pay her will be tax free, the rest of the rent will be due income tax
  
• Mortgage company may not offer the same rates (or as low fees) if the property is partially let
  

Sounds like a disaster that is going to cause resentment(?). I appear to be late to comment but hopefully there are some new bits in here...

I understand the dads perspective but if you are going to be named on the mortgage then I don't agree with fobbing you off as a 'renter'. If you end up in negative equity and split up, is the dad happy to accept any loss too? Doubtful!

We have calculated the value of our place as a % value taking into account our significantly different deposits. This way, if we separate, we take a % which covers us for a rise or fall in value. This is written down and with the land registry, IIRC.

You'll want to look at Tenants in common where you can declare a % value. You may then also choose to have your solicitor provide a Deed of Trust which outlines what happens in certain events.

On a side note, you're in a relationship, I trust you'll probably end up with joint accounts and not argue over who earns more (nor care) so why should it matter with where you live.

Thanks all, as mentioned we havent really discussed it and it was just a vibe I got from the rents. I think it will all work out completely fairly in the end..

cool, you'll be well prepared to lead the conversation when it does happen! Didn't have a clue what all the garb I just wrote was a year ago.

In modern times, if you remortgage with same provider, do they make you resubmit earnings/salary or since they already have the risk they're happy to just do it?

Ah ok thanks, that makes sense.

@laner I remortgaged staying with Nationwide a few months back and it was just a simple cut-over.

Interested in this also. Not due to end the fixed term until next year but my salary has gone up considerably (new job with higher basic instead of low basic plus commission) but mrs_com's has gone down (dropped to 3 days a week but potentially supplemented by freelance work). We're probably better off on the whole but it's a weird scenario to try to explain.

@middleofnowhere - did the simple cut-over include a lower rate/better offer or was it a continuation of the same rate?

I assume if our broker finds a better deal elsewhere, they'll need full application instead of just the proof that the repayments have been made in full and on time?

Remortgaging with different provider (have moved from Coventry BS to Halifax to Santander over the years) meant a complete new application (done through our IFA) along with submitting employment/salary details, etc.

Remortgaging with same provider (Santander). All done on the phone in 20 minutes and most of that was them asking time and time again whether my wife was in agreement to this as they were only speaking to me (joint mortgage, etc). They had offered a new fixed deal (5 years) at a much better rate (2.89% down from 5.09%) 3 months before the current fixed rate deal was due to end and the fees payable (new mortgage arrangement fees only, no early repayment fees) were less than the interest we'd save in those 3 months so it was an easy choice to make. I kept the same terms for the rest of it (same expected finish date) and declined the option to change it from an interest-only mortgage to a repayment mortgage (prefer the flexibility and we make the capital repayments anyway).

It was a lower rate keeping the term from the previous mortgage. I have my current account with Nationwide too which could have been a factor but if it was it wasn't mentioned during the sales pitch.

The previous time I re-mortgaged I switched provider and had to supply the usual proof of earnings etc. although I don't recall it being quite the level of scrutiny that I got with the original application.

Cheers, really helpful. doing the 3 day + plus self-employed thing same as @stevo_com 's wife, so worried about my current low PAYE income would stopping me from remortgaging.

Agree, all really helpful.

Did you have to contact them to start the conversation or did they call you? Should I set a reminder for 3 months before the end of the fixed term to ring my provider?

They'd been writing letters for a while, but always worth calling them up to see if they'll do something.

In general they want to keep existing customers as they're less risky than new customers and they still get a new mortgage arrangement fee (which is better than you going somewhere else on a Bosman).

Looks like the online application for Halifax is fairly straight forward.

I'm on a 4.79% deal fixed for 2 years until end Sept 2017

Tentative check shows me that I could likely (if I was looking to switch now) get either;

a 2 year fixed at 2.89% - saving me £250 a month

a 5 year fixed at 3.98% - saving me £150 a month

Hypothetically, which of those sounds more appealing?

2.89 sounds steep - Any idea what LTV you have at the moment?

For risk averse me, I always try and fix 5 years at a time.

It's essentially a gamble on what interest rates will be like in 2 years' time. Still low and you've "wasted" £2400. If they've rocketed up then you could be saving quite a bit more than that over the subsequent 3 years.

At a very rough guess it's (or could be) about 80%, started with 95%

Then that does sound quite high.

Can you quote a higher value/lower LTV when remortgaging over the phone though? Sounds like that would be a more in depth application

That's their standard it seems for my estimated LTV and the amount remaining. If the place goes up in value or I manage to overpay enough in that time to shift the LTV to the next bracket then it would be

2 years- 2.74%

5 years - 3.44%

This is all hypothetical right now. Who knows what will happen between now and next July. I just want to understand it so I know where to look when the time comes.