buying house

[dianamarie]

My fiancee and I are both in our 40's and would like to purchase a home together. We are thinking a fixer upper house in the 80k-100k range.
I have great credit and could get the mortgage in my name alone. I have 30k to put down
My fiancee does not have good credit due to foreclosure on his record a few years back after a messy divorce. He has nothing to put down on house but has great job that could support making payments and home improvements to home.
My thought is to purchase the home in my name (title and mortgage), he make the payments and any improvements to home. When that amount paid equals the 30k I initally put down we refinace and both names go on title and mortgage.
We would have a written agreement that in case of a break up he would get 100% of the money he paid into home back from me, and I would continue on with the home or sell it.
He thinks this is not a good idea, what do you say?

[disneysteve]

Welcome.

I would not buy a home jointly with anyone other than your spouse. If you can buy the home yourself and afford the payments yourself, that's fine. He can live with you. He can pay you rent. He can help out with expenses. But the home should be yours outright, title and mortgage.

I would definitely not sign anything committing you to paying him anything if the two of you break up. If he leaves, he leaves. The house is yours. He has no rights to it. He doesn't get paid for leaving you. He doesn't get reimbursed for what he spent while he lived with you.

[CashUp Sammy]

Good in theory, but you know what they say about best laid plans and all that...

Couple here I know things just got very messy like that. After 12 years together with her contributing (then ultimately paying off a decent chunk ) of his mortgage whilst together, after breaking up she is having a hell of a time getting him to pay her back some of the value of the debt free home. She'll likely never see it. Good luck to him explaining to his new wife why he has to pay a few hundred a month to a woman in another country now.

I'd be wary that lawyers could be another expense that needs to be factored in!

You can always continue to do this and then when you get married jump into it.

[ACarboni]

My fiancee and I are both in our 40's and would like to purchase a home together. We are thinking a fixer upper house in the 80k-100k range.
I have great credit and could get the mortgage in my name alone. I have 30k to put down
My fiancee does not have good credit due to foreclosure on his record a few years back after a messy divorce. He has nothing to put down on house but has great job that could support making payments and home improvements to home.
My thought is to purchase the home in my name (title and mortgage), he make the payments and any improvements to home. When that amount paid equals the 30k I initally put down we refinace and both names go on title and mortgage.
We would have a written agreement that in case of a break up he would get 100% of the money he paid into home back from me, and I would continue on with the home or sell it.
He thinks this is not a good idea, what do you say?

I am quite satisfied by your thinking Diana. You should with your decision and if possible explain all these things to your fiancee.

[snafu]

Welcome to SA. Sorry but I agree with fiancee, your proposal is not in your best interests. I wish I knew what words to use to persuade you to change your point of view. If you are putting up downpayment and mortgage payments, interest and taxes you bare the entire risk.... It's really more than 100% because fiancee is ineligible to acquire a mortgage and may have other debt like vehicle payments and CC balances that leave him in an insecure position as a 40 y/o. Mortgages are so dangerous because unlike loans you may be familiar with, a mortgage front loads interest and it takes a long time to begin to reduce the loan.

Until you two are legally married and financially secure, the house needs to be in your name. As Dr. Steve has explained fiancee's contribution needs to be market value rent as he would pay rent and some utilities where ever he choses to live. You certainly can chose to spend that income/rent for utilities [heat, electric, trash, cable/internet, etc], insurance, reno supplies, tools, trades, or whatever you decide. I didn't mention food because I believe that cost should be shared.

I'm left with the impression that you're acting out of emotion which is incredibly dangerous when making decisions on something as illiquid and financially dangerous as a fixer-upper. It doesn't take much to turn it into a money pit with the most negative connotation. Of course I've jumped to the conclusion that you would both contribute 'sweat equity' to your proposed fixer upper based on your individual skill sets. If fiancee is in 'the trades' you could pay him his hourly rate as journeyman 'X.'

If you are thinking of 'flipping' for profit, you will need to track all costs for tax reasons.

[bjl584]

When is the wedding? Why not just wait until you are married to buy?

I wouldn't buy a house jointly with someone that I wasn't married to. Too messy and complicated should there be a breakup.

[Retired To Win]

Welcome.

I would not buy a home jointly with anyone other than your spouse. If you can buy the home yourself and afford the payments yourself, that's fine. He can live with you. He can pay you rent. He can help out with expenses. But the home should be yours outright, title and mortgage.

I would definitely not sign anything committing you to paying him anything if the two of you break up. If he leaves, he leaves. The house is yours. He has no rights to it. He doesn't get paid for leaving you. He doesn't get reimbursed for what he spent while he lived with you.

Steve's advice is the prudent way to go. Your boyfriend (and you) can consider whatever he does pay towards the mortgage as being simply rent. I mean, if he does not live with you, he'll have to live somewhere and pay rent. So.

As far as home improvements go, better you should hold back $10K of the $30K you have for a downpayment and stick it in a Home Improvement Fund savings account. And pay for the work yourself. You'll still have $20K for a downpayment and be able to avoid PMI.

Good luck.