Mortgage options

[twinmomma]

I'm looking for some advice on the best way to handle moving forward with my mortgage. 

Currently, I own the house in my name and have a solid mortgage with a good credit score. My boyfriend and I were going to purchase a house together and sell this house, but with the housing market the way it is, there's no good options out there for us in our price range, so we've decided to stay put for now. 

He has down payment money in cash, just sitting in the bank. He currently just pays me "rent" essentially, splitting the cost of the mortgage and utilities with me each month.

We're wondering if it makes sense to: 
A. Have him make a large lump sum payment to my mortgage and recast it to lower our monthly payments
B. Refinance the mortgage and make a large down payment as part of that process (We would get a lower interest rate than I currently have if we did this, but it's not so much lower that I'd bother refinancing on my own without the down payment piece)
C. Refinance the mortgage, make the large lump sum payment, and add him to the loan as a co-borrower to give him more stake in the property he's helping pay for
D. Have him just keep the money he has in the bank so it's liquid and available and keep on keeping on as we have been

Any thoughts on this? Pros/cons to any of it?

[ohgillian]

I would D, KOKO. I personally don't think you should get your finances tied up with his in real estate unless 1) you have a written contact about it, or 2) you get married, which is basically a written contract anyway.

If you do want to proceed, I'd consult a lawyer about how to protect both of you.

[AdaraMarie]

I pick D. Partly because of the legal aspect in the previous post but also so if things change and you are able to buy a house sooner than you expect you have the cash on hand for the down payment and don't have to wait for your house to sell.
Never would I do C.

[wildrice]

Feb 11, 2021 10:16:13 GMT -5 ohgillian said:

I would D, KOKO. I personally don't think you should get your finances tied up with his in real estate unless 1) you have a written contact about it, or 2) you get married, which is basically a written contract anyway.

If you do want to proceed, I'd consult a lawyer about how to protect both of you.

I would agree. Without being married (or having some other legal documents in place), I would not want to give him too much ownership over a house that you currently own on your own. Unless his down payment is roughly equal to what you have put into it up to this point, you'd still be the one with the larger financial investment. In the event that things go south with your relationship, you don't want to end up being forced to split it down the middle.

I am not necessarily against joining general finances in advance of marriage (my H and I joined ours a couple of years before we actually got married -it was just easier with our circumstances) but neither of us brought in a lot of money to begin with so it seemed unlikely either of us would get screwed if we had to separate again. I wouldn't have put his name on my retirement/car/other assets without marriage, though. 

[twinmomma]

In regards to the legal aspect - when we buy a new place, the plan was to put both of us on the mortgage and draft up a contract stating what we had each put down for down payment money. We're both divorced, so we know the legal ramifications of having to split down the middle and the potential to get screwed. We did already discuss needing some sort of legal document in place to cover us in case we split with property in both our names and no marriage.

[ohgillian]

[Sorry - I had posted a followup but then I deleted so I could read the OP's next post.]

[CrazyLucky]

When you say "stay put for now," what is that time frame? If it's less than several years, then I agree with PP, just KOKO. But assuming your interest rate is pretty low, I would KOKO anyway. I know the feeling of wanting to pay off the house, but it doesn't make a lot of financial sense right now.

[archiethedragon]

D

[suzubell]

D.

[wanderingback]

I have a long term partner (not married) and we own a home together, so I'm not like the other posters who are saying you shouldn't get a house with someone unless you're married. So with that being said, do you think you'll buy a house together in the next couple of years? Obviously no one can predict the future, but it seems like it'd be a reasonable idea for him to keep the current down payment available, so you all have it when you're ready to move if you do think you'll buy when things are "normal". 

If you really don't think it's feasible to move in the next few years, and you all were already planning to buy something together, then I guess the refinance option with him becoming a borrower makes sense if you all are building a life together and using some of the down payment would make sense financially to pay off the house or have a low monthly payment. I've never refinanced, so I don't know any of the details.

Obviously I don't know the details of your relationship. For me I didn't have 2nd thoughts about buying a house with my partner. We do plan to be together for a long while, but I know nothing is guaranteed in life. But even if we break up eventually, just knowing both of us/our relationship/our personalities, financially it won't cause any drama to untangle things financially (we have some stuff in writing, but nothing from a lawyer). But if you're having 2nd thoughts at all, then I think D would obviously make the most sense. 

[scout8]

I want to mention that your C option just makes him responsible for the mortgage. It doesn't give him any ownership interest. If you want him to have a stake in the house, then you would need to make sure that he gets put on the deed.

When I was in your situation, we went with D because it was easiest.

[twinmomma]

Thanks for all the tips! I was leaning towards D, but he offered up the money to put towards this house (basically option A) and I started spiraling over other options too. Like wanderingback, I have no qualms with buying a house with him and sharing finances that way. That's our plan anyway, the housing market just isn't cooperating right now. We don't know when things will level out enough to realistically shop for a new place, so I think keeping the money liquid makes the most sense, just in case.