FI on mortgage & title

[lliang_chi]

Hi all,

I figure there are some really smart finance-y/lawyer people here so I thought I''d ask. Plus there''s gotta be people who are in my situation, so I''m polling for previous experience.

Background:
I bought a condo a few years ago. This month FI moved into my place. Theoretically we''ll be splitting all the expenses (mortgage, bills, etc) 50%, paying for everything from a joint account. Theoretically because it hasn''t been set up yet.

So anyway, my rationale is, since FI will be paying the mortgage, it''s only fair that he goes on the title too. And if he''s on the title, it''s only fair that he shares the responsibility of the mortgage too. So I call my mortgage company and I need to refi to put FI on the mortgage. And they suggested I don''t refi because I got a good rate that I probably wouldn''t be able to get again. But I can call my title company and add him to the title. But then he gets 1/2 my equity (which I''m okay with since we''ll be getting married) but without any of the mortgage debt. Plus the mortgage might help him a little with taxes in April.

So my question is: Is there some legal contract that we can draft up that says, I''ll put James on the title, but he''s co-responsible for the mortgage. And/or if he is on the title then he doesn''t get my equity until we''re married?

Any suggestions on what I can do?

 

[doodle]

i''d talk to a lawyer on this one because there''s a lot of things involved in that. honestly, if i were you, rather than handing over my assets to my FI, id be getting a prenup to protect them. it sounds like you have a pretty sweet deal on the place, and God forbid, but should anything ever go wrong, you''d want that sweet deal to stay as such. perhaps it''s a cynical view, but it never hurts to be safe, and if you guys live happily ever after for the rest of eternity, it hasn''t hurt him any either. i''m thinking a prenup might would cover some of the legalities in this situation either way, but i''m not positive. good luck working everything out, and the best of luck to ya (anything involving legal crap is a PITA, haha!)

 

[calidaisy]

if i were you, i personally would NOT add him on the title UNTIL we're married.
in fact, even after we're married ... i might keep the title as is, until we buy a bigger place together or something.
the reason i say this is, in case things don't work out ... it's much easier for him to recoup what he paid into the mortgage than for you to undo adding him on the title.

but it also depends on where you live and when you plan to get married.
needless to say, what the equity is in the property. because if you don't have much invested in the property yet, it really shouldn't matter either way.

 

[October2008bride]

I know rules/laws are prob different in the States, however if you were in Canada, I''d tell you to sell your place prior to marriage, and buy something together where you each put in the same amount, share the mortgage/title/responsibility.

Our family laws basically say that even if you own a house alone prior to marriage, if he moves in and it becomes your marital home, then it is split 50/50 if you were to get divorced. Doesn''t seem fair since you have put in all the money, taken all the risk, etc.

I know it is unromantic, but don''t put him on title without being on th emortgage. Even then, think about hte fact that you''ve been paying the mortgage for however long AND put a down payment on it.

 

[Fancy605]

Date: 7/11/2008 3:44:37 PM
Author: calidaisy
if i were you, i personally would NOT add him on the title UNTIL we''re married.

in fact, even after we''re married ... i might keep the title as is, until we buy a bigger place together or something.

I tend to agree! Adding his name to the title might be more trouble than it is worth. I would just wait and put both of your names on the next home you purchase--well unless you are planning to stay in the condo forever of course. Then, I''d wait until after the wedding.

 

[lliang_chi]

All very good points ladies. I know where you are all coming from. I agree, I did put the money down for the down payment so it's my equity (at risk of sounding like a spoiled child--mine, mine mine. ha ha).

I'm just at a loss of what to do. I mean, I can't be the first instance of this kind of arrangement (where the mortgage & title is in only one person's name). But I can't figure out what to do here. I'm not really so worried about how romantic things are etc, I mean, I brought this up to him, like "Hey, this is a big transaction we need to figure out." But it's not like a regular roommate situation where you just have another person living with you. I mean, we're going to be getting married and we're getting joint accounts and sharing expenses and stuff. It's just sticky.

 

[MoonWater]

I love my FI to death and I know and knew pre-ring that we would get married. However, if I owned my own place, I would not put him on the mortgage until we were married. He has a substantial amount of money in a retirement fund and my name will not be put on it until we are married. We trust each other, but don't see the point in rushing such a thing. When it's official, it's official. It really doesn't make a difference that he is contributing now since he will obviously be on it later (post marriage).

 

[decodelighted]

He won''t get the tax benefits without being on the mortgage ... the benefits are based on being able to partially deduct mortgage interest. When you''re married you''ll experience that benefit as a *couple* no matter who is on the title OR mortgage.

I''m married now & we live in a house I bought six years ago. My DH isn''t on the title OR the mortgage. We agreed that the equity gained while I lived in the house before he moved in is and will be "mine". But, of course, it''s really "ours". Our NEXT house will be purchased by both of us using most of the gains from this house.

 

[Fancy605]

How long is it until the wedding? Unless it''s a pretty long term engagement, I doubt that he''d see much in the way of tax benefits anyway because the year is already more than 1/2 over. Plus, like deco said, he''s got to be on the mortgage for benefits anyway (or at least that''s my understanding)

The house DH and I live in is actually currently just in my name. We started building before we were married, and we financed it using my credit, since mine is better, so we just put the house in my name only because it was the easiest thing to do really. We actually closed on the house right after we got back from our honeymoon and moved in a few weeks later. We haven''t bothered to add him to the title yet simply because we''re probably going to move in a few years anyway, and right now adding him doesn''t seem worth the gas it would take to get to the title office for us to sign stuff. I say, do what''s easy.

 

[rockzilla]

I would wait as well, especially if the wedding is a year or less away.

Somewhat related, I have a friend who bought a house with her fiance (who was not really that stable financially from what I gather) She put down most of the downpayment and they had been paying the mortgage together.

A few months ago, they split up due to a MAJOR betrayal on his part (not cheating, but in the same realm).

She moved out because he wanted to keep the house and she could no longer live with him. He is still living there with a female "roommate" (aka new...girlfriend?...whatever) but there is no way to put it in his name only because his credit/income is CRAP. And, it is likely that refinancing/selling would leave them underwater anyways because of the recent turn in the market. Not to mention that he refuses the idea of selling...he really likes the house and likes being a homeowner, probably especially since he would have never been stable enough to do it on his own.

She is still too devastated over the breakup to do anything like take him to court. He and the "roommate" are paying the mortgage, but if she moves out, or he loses his job and stops paying, etc, and the place is defaulted/foreclosed on, her credit is SCREWED. She would not be able to buy another place for a long time. Luckily for her she is out of the relationship, before it turned to marriage, but she still has this hanging over her head WITHOUT the protections of marriage or divorce courts or a prenup.

It is so sad...obviously not something that you expect to happen, and not saying it would happen to you, but it is much easier to deal with that after you get married than before.

 

[dani13]

Lliang-

Honestly, I wouldnt do anything....I bought my condo before MH and I were even engaged (we were seriously dating)...So, the mortgage and title are both in my name only, even to this day, and we have been married almost a year already!!! MH and I share all of the household expenses, including the mortgage. We didnt see the need to change anything, even after we got married. Also, the attorney who handled my closing for the condo told me that there would really be no need to change anything (e.g. putting MH's name on the mortgage and title after we were married). He said it simply wasnt necessary.

If I were you, I would leave everything as is. If you want to add his name to the title after you are married, then so be it, but even that isnt necessary. If he is living with you in the condo, you guys should be splitting the mortgage/bills anyways, regardless of who's name is/isnt on the mortgage. Its just a formality, really.

Good luck!!!

 

[newbie124]

Date: 7/11/2008 6:28:35 PM
Author: rockzilla
I would wait as well, especially if the wedding is a year or less away.

Somewhat related, I have a friend who bought a house with her fiance (who was not really that stable financially from what I gather) She put down most of the downpayment and they had been paying the mortgage together.

A few months ago, they split up due to a MAJOR betrayal on his part (not cheating, but in the same realm).

She moved out because he wanted to keep the house and she could no longer live with him. He is still living there with a female ''roommate'' (aka new...girlfriend?...whatever) but there is no way to put it in his name only because his credit/income is CRAP. And, it is likely that refinancing/selling would leave them underwater anyways because of the recent turn in the market. Not to mention that he refuses the idea of selling...he really likes the house and likes being a homeowner, probably especially since he would have never been stable enough to do it on his own.

She is still too devastated over the breakup to do anything like take him to court. He and the ''roommate'' are paying the mortgage, but if she moves out, or he loses his job and stops paying, etc, and the place is defaulted/foreclosed on, her credit is SCREWED. She would not be able to buy another place for a long time. Luckily for her she is out of the relationship, before it turned to marriage, but she still has this hanging over her head WITHOUT the protections of marriage or divorce courts or a prenup.

It is so sad...obviously not something that you expect to happen, and not saying it would happen to you, but it is much easier to deal with that after you get married than before.

Hi Rockzilla,
Wow, I really feel for your friend. Financial situations with ex''s are always difficult to navigate. If you think your friend can handle it, though, I STRONGLY encourage you to talk to her about getting some legal and financial protection regarding her situation ASAP.

My FI was in a similar situation w/ an ex girlfriend. They bought a house, broke up, he moved out (and out of state), she stayed supposedly paying the mortgage on time. The loan was in both of their names and he was still sending her checks for his half. Well, apparently she became really irresponsible and stopped paying the bills and their house went into foreclosure. Since his name was still on the mortgage, it did damage to his credit report and when we started looking for a place ourselves, his lower score would''ve meant much higher rates for us.

Luckily, I had a high enough score to get a loan on my own. He pays half the mortgage, but everything is in my name. I think we will probably wait until the next home before purchasing together, and hopefully by then his credit will have improved enough.

I am very practical when it comes to financial stuff, and it''s probably one of the first things I''d take care of if something happened to our relationship. However, I know some people (like my FI and apparently your friend) prefer not to think about those things while they''re dealing with their emotions. But things can get much worse for them if they don''t take the bull by the horn, so to speak, and take care of themselves first. It won''t be pleasant, but at least she''ll be protecting her future...a bank lender isn''t going to care about all the relationship details when it comes time to approving her for another loan down the road.

 

[lliang_chi]

Rockzilla,
Yikes, I really hope your friend can sort through all that mess. That's so terrible!!

Thanks for all the input ladies, I really appreciate it. It helps to hear what you guys have done. Everyone I know either bought a place together with their SO or were/are renting and will buy together. I looked up some more information online and asked some of my friends who are lawyers too. In case anyone needed to know IL is a not a community property state.

Oh and the engagement will be 19 months, wedding tentatively for Oct 24, 2009.