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115AJ
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Aside from my views on DoTs....
and the fact that people who give 'gifts' have no say in what happens to that gift
The logical solution would be, once the charges on the property are cleared, £30,000 is returned to B, with the rest split equally.0 -
TLDR: You either need a complex balance transfer formula based on mortgage payments or to do what guest says.
The alternative is a solution based on shares in the property.
eg, you are putting in 1.5% of the property value and 50% of the mortgage costs.
Your partner is putting in 13.5% of the property value, and 50% of the mortgage costs.
So you've got 1.5% to start with, plus 50% of the remaining equity, and they have 13.5% to start with plus 50% of the remaining equity.
So that would give shares of 56% for your partner and 44% to you.
But if you wanted to sell and paid off 12.5k from the mortgage, you've then got a scenario as follows:
250 sale price.
200 mortgage
50k split between the two of you in that ratio doesn't give them back their deposit.
So! I think the best (simplistic) way of dealing with this is to take Guest's suggestion. If you want a route whereby your partner gets a return on their "investment" of 33.75k should prices go up, then you'd need some sort of transferring balance formula that shifted the balance of equity more and more towards you as you paid back the mortgage.
Equally, you're going into this as a partnership - maybe you just want to treat is that? Otherwise what will you do if one of you gets a big payrise/paycut? Will you now not be able to go on holiday together because one of you has still got to manage your half of the mortgage while the other has a big surplus in their income?0 -
We just have a Google Sheets spreadsheet, that details the total physical cash invested by each party, with percentages based on the total purchase price of the property.
As we make repayments to the family who helped us out, we just jot it down and the percentages adjust to reflect the ownership (in our case purchase price less cashback from the mortgage and £300 back from the vendors who did so to make us complete 2 weeks earlier than we wanted).
A £5,450.02 2.60%
B £23,242.45 11.09%
C £9,374.13 4.47%
D £10,000.00 4.77%
Total £48,066.59
As repayments are made to C and D, the amount is split equally and added to A and B's shares above.
We don't have a deed of trust just an informal agreement that if things went bad C and D get their money back or their percentage of the value of the property, and then A and B (partner and me) get our portion back with the remainder (i.e. the rest of the money after the mortgage is repaid) split equally between A and B.0 -
We just have a Google Sheets spreadsheet, that details the total physical cash invested by each party, with percentages based on the total purchase price of the property.
As we make repayments to the family who helped us out, we just jot it down and the percentages adjust to reflect the ownership (in our case purchase price less cashback from the mortgage and £300 back from the vendors who did so to make us complete 2 weeks earlier than we wanted).
A £5,450.02 2.60%
B £23,242.45 11.09%
C £9,374.13 4.47%
D £10,000.00 4.77%
Total £48,066.59
As repayments are made to C and D, the amount is split equally and added to A and B's shares above.
We don't have a deed of trust just an informal agreement that if things went bad C and D get their money back or their percentage of the value of the property, and then A and B (partner and me) get our portion back with the remainder (i.e. the rest of the money after the mortgage is repaid) split equally between A and B.
This is sounding a lot like mortgage fraud, but I presume no-one would keep spread sheets of that kind of thing and I must be misreading it0 -
Myself and my partner (B) are buying a property together. We will be tenants in common with unequal shares with a Declaration of Trust.
In total our deposit towards the property is 37.5k.
Purchase price £249,999. We have a LTV of 85%
B's grandparents have gifted B 20k and B's mother has gifted B 10k - both towards the cost of the deposit.
If B and I were to separate, both B's grandparents and mother would like the money to be awarded to B.
The remaining 7.5k deposit is contributed equally from myself and B.
We will equally be contributing to the mortgage payments, bills and legal fees including stamp duty.
Could anyone suggest what percentage of shares would be fair on the Declaration of Trust?
So £30k of £250k is B's family money which they want B to get back in the event of a split. All other contributions are 50:50.
You should stipulate that in the event of a sale, the first 12% of the sale proceeds goes to B and the remainder is divided equally in the ratio of 44% each. Costs are then apportioned equally between A and B, including redeeming the mortgage balance in equal amounts by taking half of it from each share.
So let's imagine that B finds out about that disturbing....thing you do involving fluffy toys, and leaves you. You sell up for £325k. The sale costs are £8k, leaving £317k.
B gets initially 12% of £317k = £38,040, then a further 44% of £317k which is £139,480.
A gets £139,480.
The original mortgage was £212.5k. Let's say the outstanding mortgage is £200k so £100k is taken from each share. B is left with £77,520 and A with £39,480.
You have to do it as proportions because if you simply return the original sum, then A either keeps half the gain on money B put in, or if it goes the other way, B gets £30k back even though the house has fallen.0 -
Errrrr, just write down each owners deposit amounts and everything else is split 50:50, and proceed with equal shares.
Makes it very easy and clear without any complicated sums....in the event of a split in the future this will just be another thing to argue about.0 -
foxy-stoat wrote: »Errrrr, just write down each owners deposit amounts and everything else is split 50:50, and proceed with equal shares.
Makes it very easy and clear without any complicated sums....in the event of a split in the future this will just be another thing to argue about.
There's nothing remotely complicated about "the first 12% of the sale proceeds go to B reflecting the gifts fromn family, and the remainder is split equally".
If it goes up to £750k and they split up, the first £90k goes to B and then they get £360k each.0 -
westernpromise wrote: »There's nothing remotely complicated about "the first 12% of the sale proceeds go to B reflecting the gifts fromn family, and the remainder is split equally".
If it goes up to £750k and they split up, the first £90k goes to B and then they get £360k each.
I don't think that's what the OP wanted, but I may have misread it0 -
I'm assuming the OP doesn't want to create a situation where B is guaranteed to get £30k back regardless of whether the house has actually fallen in value. That feels unfair to A.0
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westernpromise wrote: »I'm assuming the OP doesn't want to create a situation where B is guaranteed to get £30k back regardless of whether the house has actually fallen in value. That feels unfair to A.
True, though im not sure.
But it certainly didn't see like he/she intended B to gain extra on the initial deposit0
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