Invest in HIS house?

[venusianster]

What is the name of your state? Pensilvania

Hello,

I am not sure if I should post this thread in the family or real estate section, as it covers both issues. Hopefully you can help me get a somewhat definite answer.
I am currently living with my boyfriend for over three years. We rent the apartment together. Our lease is over in a couple of months, and he wants us to move in his house, that he bought two years ago. His only name is on both-mortgage and deed. He was renting this house out all this time while we lived in the other apartment and of course, renters did some damage to it. Now, that we are going to move in, he wants to have some remodeling and upgrades done, that total to $ 5K. He has not very good credit - and I have perfect, so he wants me to get a personal loan, or apply for a Home Depot credit card and cover the cost of all the repairs.
I told him, that I can do it only if he adds my name to the deed, so we can be equal owners of the house. My question - will this action protect my interest if the worst is to happen? If I am on the deed (and NOT on the mortgage) am I an owner as well? What rights being on the deed give me? And what if we break up or something happens to him - am I going to be stuck with this 5k debt? What should I do to protect myself better? I appreciate all answers. Thank you.

[Ohiogal]

Originally Posted by venusianster

What is the name of your state? Pensilvania

Hello,

I am not sure if I should post this thread in the family or real estate section, as it covers both issues. Hopefully you can help me get a somewhat definite answer.
I am currently living with my boyfriend for over three years. We rent the apartment together. Our lease is over in a couple of months, and he wants us to move in his house, that he bought two years ago. His only name is on both-mortgage and deed. He was renting this house out all this time while we lived in the other apartment and of course, renters did some damage to it. Now, that we are going to move in, he wants to have some remodeling and upgrades done, that total to $ 5K. He has not very good credit - and I have perfect, so he wants me to get a personal loan, or apply for a Home Depot credit card and cover the cost of all the repairs.
I told him, that I can do it only if he adds my name to the deed, so we can be equal owners of the house. My question - will this action protect my interest if the worst is to happen?

The worst meaning what -- if you break up? Well you would be an owner of the house depending on how he adds you to the deed. What I mean is my husband's name is on the deed to my house but he has NO current interest in the home. So how is he going to add you to the deed? As joint tenants with right of survivorship (you both own equally and if something happens to one of you the house automatically transfers to the other) or tenants in common (can be unequal portions)?

If I am on the deed (and NOT on the mortgage) am I an owner as well?

Depends on how you are on the deed. And some mortgage companies will call the loan if the deed is transferred to add someone else to the title. Which means the entire mortgage would immediately be payable unless it is refinanced in both your names.

What rights being on the deed give me?

It may give you an ownership interest in the house. Usually does. But again my husband's name is on the deed for my house and he doesn't have an ownership interest due to the deed(he has dowry but that is different).

And what if we break up or something happens to him - am I going to be stuck with this 5k debt?

If your name is on the debt, then you are legally responsible for the debt.

What should I do to protect myself better? I appreciate all answers. Thank you.

If you have such questions why are you considering doing this? YOu seem to doubt that you will remain with him which leads me to believe that this is a risky proposition. If it were marital debt then he would be partially responsible for it but you aren't married. Truthfully getting married would protect you better and becoming a joint tenant with rights of survivorship would also help you along. But you may need to get on the mortgage.

[venusianster]

Thank you for the answer, Ohiogal. I have no wish or intention to get on the mortgage. I am still hoping to buy another property before getting married myself. And to that matter I would like to get married not just because I want to protect my rights. Yes, you are right - currrently there is a lack of trust on my side, and I am not 100% sure that I will be with this man till death. I have reasons for that. But we want to live together, and we want to give it a good try, and I do want to live in a nicer home. So, I am trying to help US out, but at the same token I dont want to be left out of the picture, and have some rights on what I am investing into.
So....how should I be put on the deed, so I can have the interest in the house? What is the name for this procedure? And please - do not get me wrong here. I am trying to PROTECT myself ONLY. I do understand that if we break up tomorrow - he might tell me to leave, and I will have to pay the debt myself for the house I have no rights for.

[CJane]

Originally Posted by venusianster

So....how should I be put on the deed, so I can have the interest in the house?

You're considering investing around $5000 into a house that you're planning to live in, and you want an interest in the house should something happen? For a $5000 investment? What's the appraised value on the house?

Perhaps a better option would be to write up a contract allowing your BF to use up to $X on a Home Depot card (or whatever) and have him pay you back in installments? Ifhe doesn't pay you back, you can file a lien against the house.

[venusianster]

Thanks CJane. At today's market the house values less that what he ows after the refi he did a year ago. It is on the market now and nobody wants to buy. Thats why we have to move in there. Yes - you are right - may be it is better to write up a contract stating that he will pay me back. Can we do it ourselves or do we need an attorney for that? Also - if there is no contract and the worst happens - can I file a lien against the house? Or will I be able to file anything at all if there is no contract with him, only a bunch of receipts from Home Depot? Thank youl.

[ceara19]

Originally Posted by venusianster

Thanks CJane. At today's market the house values less that what he ows after the refi he did a year ago. It is on the market now and nobody wants to buy. Thats why we have to move in there. Yes - you are right - may be it is better to write up a contract stating that he will pay me back. Can we do it ourselves or do we need an attorney for that? Also - if there is no contract and the worst happens - can I file a lien against the house? Or will I be able to file anything at all if there is no contract with him, only a bunch of receipts from Home Depot? Thank youl.

Without a contract, he can easily claim that the money was a "gift" from you.

[CJane]

Originally Posted by venusianster

the worst happens

You're going to have to clarify what 'the worst' is. Because if I lived with someone and was contemplating forever with them, 'the worst' wouldn't be a breakup in which I might not get my $5K back.

[venusianster]

CJane, the worst in this case is breaking up. And may be 5K may be not so sufficient for you, but for me it is. I mentioned already that although I want to live with this guy and commit to serious relationship, I do not trust him entirely. And do consider that some day we might go sepparate ways.

[venusianster]

oh.....and also. I am going to pay 50% of the mortgage, becuase we always split everything 50-50. So.....paying half the mortgage, bills and investing in repairs....dont you think I should at least think about options? Beleive me, I have been used financially before and lost, not once.

[Silverplum]

Not legal advice: I cannot imagine why you are even considering moving in with this guy if you don't trust him. Especially if you've been burned before.
My 2 cents.

[CJane]

Originally Posted by venusianster

oh.....and also. I am going to pay 50% of the mortgage, becuase we always split everything 50-50. So.....paying half the mortgage, bills and investing in repairs....dont you think I should at least think about options? Beleive me, I have been used financially before and lost, not once.

But you're already paying 50% of the rent on your apartment, right? What's the difference between what you're paying now, and what you'll be paying when you move?

My point isn't really that $5K isn't a lot of money.

You're already living with this guy, and you're already paying 1/2 of everything. So really, all you're looking at adding to the mix is this 'loan' for $5K. Make it a legal loan, and you're covered. Then you don't need to have 'an interest' in a house that you've already stated is worth less than it's mortgaged for.

[panzertanker]

Originally Posted by venusianster

oh.....and also. I am going to pay 50% of the mortgage, becuase we always split everything 50-50. So.....paying half the mortgage, bills and investing in repairs....dont you think I should at least think about options? Beleive me, I have been used financially before and lost, not once.

Draw up a contract with stated amounts owed, penalties and interest. That would be the safest thing based on your scenario.

As for paying 50/50... until you solidify your relationship it is just rent money to you....

[venusianster]

Thank you for advice. So...about 50/50. When people are married it is NOT rent then? Even when one party is not on the mortgage/deed? If I understood you correctly - when relationship are solidified - you pay mortgage and not rent? And it actually "counts" as a contribution to the house?

[LdiJ]

Originally Posted by venusianster

Thank you for advice. So...about 50/50. When people are married it is NOT rent then? Even when one party is not on the mortgage/deed? If I understood you correctly - when relationship are solidified - you pay mortgage and not rent? And it actually "counts" as a contribution to the house?

I am an accountant, so I am going to give you some advice from a purely financial perspective.

You do NOT want to be added to the deed or the mortgage. He currently owes more than the fair market value on the mortgage, therefore you absolutely should refuse to be added to the mortgage, and its of absolutely no benefit to you to be added to the deed, since he is upside down on the loan. Even with an ironclad contract there is no equity for you to tap, and there is unlikely to be any equity for quite a few years....again, because he is upside down.

Therefore, you would be a fool to invest any money or credit into this property. It would be fair for you to pay a fair amount of "rent" for living there, but if he is upside down on the mortgage a fair amount of rent may NOT be half of the mortgage....it may be less than that...possibly significantly less than that.

The only advantage to you being on the deed might be if you and he continued to be together for MANY years...and if you do that without marriage then you have all kinds of other issues.

Honestly, if I were you I would refuse to have anything to do with the property other than paying a fair amount of rent, and I would even re-think the idea of living with him....sorry....but from a financial perspective you are contemplating being seriously used...

[panzertanker]

Originally Posted by venusianster

Thank you for advice. So...about 50/50. When people are married it is NOT rent then? Even when one party is not on the mortgage/deed? If I understood you correctly - when relationship are solidified - you pay mortgage and not rent? And it actually "counts" as a contribution to the house?

No, I am pointing out that you are going to be living in a house that you do not own so your monthly contribution is "rent".
You situation would solidify somewhat if/when you get married, according to your states property laws.


Basically, you should draw up the contract as I, and many others, have told you.