How To Become Financially Secure – Ref Buying Property

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Golden Coin

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What’s the best option when a couple want to buy property, when in the following situation? What makes the most since? Two or more options open to them?
Taking into account the following details
Couple, intend to marry.
Each individual can afford to buy a house on their own.
Renting @ €420 between them per month

Option 1
Buy a house between both, that will be the family house.
Intension that that will be the family house – this step to be the only step taking on the property ladder- But what if circumstances change ??? need to change location
Deposit would be paid 1/3 and 2/3
How would the mortgage be paid 1/3 and 2/3 (equal income)
How would the property be split???? Who own what?
When this house is paid for what would you do with the saving you have per month.
When couple marry, is the property slit 50/50

Option 2
He buys a property that they live in it for 3 and after the 3 years this would become an investment property- because you need to live in the property for 3 years, before you can rent the entire house?? Right?
If she lives in the property, would she be paying rent or paying the mortgage? Would this depend on how much she was paying?
After 3 years, she buys a property that will be the family home


He has his property, she has her property.
Each property can be bought with first time buyer’s entitlements.
Key questions.
Would it be an advantage to but a second property as an investment or would one be better off saving the additional income after the house is paid for and interest that they would save been mortgage free (reduce the term of the mortgage)

All options /suggestion and information greatly appreciated.
 
Honestly I think a couple intending to marry as you say you are should not be so caught up in fractions (1/2, 2/3) and who owns what and differentiating between paying rent to one another or splitting the mortgage. It doesn't seem like a partnership. Do you want to own 2 homes altogether or do you just want to have a property each to fall back on if things go wrong (not too romantic!) Anyway you can get back first time buyer status if you were to divorce (check revenue site for exact details) Of course reading on AAM you hear all the hard stories of splitting up / dividng homes etc but can't you have faith it would work out and buy the house option 1 together, split the mortgage whatever makes most sense based on wages and own it equally regardless of who paid what, since you do plan to marry anyway?
 

Hi Fizzelina
Thanks for the reply.
The option two was so we would have an investment.( not so we each would have a house to fall back on , should things not work out) If we are to go with option one , we would have our mortgage paid sooner rather than later and wouldn’t know what to do with out weekly saving.( Besides contributing to a pension) Any suggestions
We both have worked very hard for our saving and both of us want that money to work hard for us – would this be by having
A second property used as an investment
or
Would it be having our mortgage paid and them doing what with the additional money?
I think this is the main question I need advice on.

The goal is to pay back a mortgage ASAP in either situation…
It may not sound romantic, but in my opinion its best to keep money clear, (know what the best options for each of us is) separate/ equal in a relationship, call me traditional but I would like to pay/ spend what I have and not be relying on someone to pay my way.
What do poster on here do …
 
The problem is that you have asked two completely different questions and you have mixed them up.

1) Is buying an investment property with a mortgage to rent out a good financial investment ?

Who knows ? Where will house prices go, will the house yield enough rent to pay the mortgage etc etc etc. You will get as many opinions as there are people.

2) How to organise our financal affairs as a couple who want to keep our finances separate ?

You can do what you like, whatever suits you with a few provisos

a) Your wife cant buy a house as a FTB in a few years when you are both living in a family home which you bought . The Revenue are very clear that she will not be a FTB in these circumstances. You will not be able to argue that it is your house and she pays you rent, especially if she paid a part of the deposit.

b) If you do split up, you do not get to decide who owns what. A court will, unless you can decide between yourselves and even then a court will check that it is fair,
It is easy to say that you want to pay your own way and not be financially dependent on each other, but if you can't pay your mortgage some day because you have been laid off, or on long term sick leave, or one of gives up work or takes a lower paid job to spend time raising children that will change.

A court will take into consideration who bought what in the first place, what earning capacity you have in the future and most importantly what are the needs of any children ?
 
Hi Huskerdu.
Thanks for the advice. Your reply seams to make things clearer.
You cleared things up with the house as an investment- seams its best to buy one property - get mortgage paid on it and then consider buying a second property

What does one do when they have a mortgage paid and don’t buy a second property - is the additional money they have put into a pension only!!

Would i be right in saying when one gets married, everything is automatically split 50/50 and is this were prenuptials come in.

I understand where individuals become financially dependent on each other in the above situation but these are forces situations and a compromise should be made with both parties. What if the situation wasn’t forces, example one individual gave up their job, by choice, spend money on holidays and the other individual is left to pay mortgage, bills etc - Is this fair i think not, but is it when the individuals don’t decide and the courts do.
As for question 2 - Answer a , what if the deposit was paid by one persons only and
the second person didnt pay rent / towards the mortgage
 
Hi Elefantfresh

You any advice for me , i want to understandthings/have things clear before going ahead with then.
 
I know you are looking for financial advice not relationship advice but given your concern over the exact of who pays what percentage of the mortgage and yout worry that one spouse might 'give up their job and spend money on holidays etc' and that that wouldn't be fair, I seriously think you need to reconsider getting married!

Once you get married, your house is the family home, irrespective of who pays what percentage to the mortgage. If children are born, one of you becomes a stay at home parent and you subsequently split up, the needs of the children to have a family home and a parent caring for them will be uppermost in any court's mind, not the exact percentage each paid of the mortgage each year of the marriage. You need to get clear in your head that your family home is NOT a financial investment - it is a life investment, made to benefit the family as a whole over a lifetime shared or apart. You also need to get clear that, as marriage is theoretically for life, any financial arrangement and split that you agree now is extremely unlikely to remain static over the lifetime of a marriage. I have only been married 3 years and a parent/joint householder for 5 and we have already had a myriad of financial arrangements re mortgage/savings/day to day expenditure to take account of differing salaries, unpaid maternity leave, illness, unemployment and a decision by one spouse to stay at home, all in a very short space of time!

That apart, if I were 100% sure about getting married and in your position, which seems to be that both partners have plenty of cash at their disposal and don't seem to have worries about job security, I would

a) focus on buying a family home that you are both really happy with in an area that you like and that could adapt to changing circumstances (i.e. a growing family)

b) live life for a few years - overpay your mortgage if you want to shorten the term,

c) assess whether you want to have kids. If so, this will massively change your financial situation whether one spouse decides to stay at home or you work and pay childcare or do something in between. For a start, you are most unlikely to have the problem you mention earlier ('we won't know what to do with our weekly savings' ....)

d) if you still have spare money, then think again about how you want to invest it. That could be in property or in something else. You don't need to have paid your entire mortgage on the first property to buy another one as you seem to suggest in your most recent post - you just need to work out what, if you have spare money each month, is the most realistic and beneficial way to make it work for you.
 
How to be financialy secure

Thanks Txirimiri for your post. It has been very helpfull.
As you stated- your family home is NOT a financial investment - it is a life investment. I 100% fully agree with you on this.

Been financialy wise is also a life investment .
To look at been financial secure isnt it wise to put yourself in the best financial situation possible with the purchase of a property(s).This is where i get lost.
Buy a family home and in say 20 years time buy a second property that will become an investment property or each partner having a property.
Leaving a side factors such as illness, unemployment etc

Financialy what makes sense...
 
The fact that you state you can both afford to buy your own house seperately (not the boast it was a few years ago!!!) indicates the level this couple are at - high earners with a prudent approach. I would have only one person's name on the first property because:

The person with the free hand will have greater purchasing power when it comes to looking for a loan for whatever reason - purchasing second property, start a business, other investments etc. They will not be tied down with a mortgage charge - which the bank will find far more attractive to lend to.

Keeping the finances separately is handy and allows greater flexibility - for example only one person's finances may need to be assessed in some cases - you don't have to cough all your guts and show all your cards, so to speak.

It can also come in handy when things go wrong - if you lose job or business fails, you could strategically default on the mortgage etc without the other persons assets getting hammered.

Family Home Protection Act means one of the married couple cannot sell the family home on their own, so there is adequate protection for the spouse.

The disadvantage is you lose the full benefit of the FTB allowance, but in the position you are in, overall going separate is what I would recommend. And I have no doubt you completely trust each other and always will, otherwise why would you be getting married.

That's my tuppence worth
 
Are there any other disadvantages.

The advantages seam to make sense with relation to the second person having saving if either got laid off, or on long term sick leave, or one gives up work or as plendoza indicates examples such as purchasing second property, start a business, other investments etc.

Any thing we have over looked.
 
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