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  • FIRST POST
    • tubsolard
    • By tubsolard 13th Mar 17, 1:35 PM
    • 30Posts
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    tubsolard
    Unequel Deposit Amount - Joint Mortgage?
    • #1
    • 13th Mar 17, 1:35 PM
    Unequel Deposit Amount - Joint Mortgage? 13th Mar 17 at 1:35 PM
    Hi all,


    My girlfriend and I are about to buy our first house together.


    She has a property to sell with a big chunk of equity to use as a deposit and I have savings to put in but her share will be about 5x the amount that I'm putting in.


    We have openly talked about protecting her interest (and mine to a degree even if it is less) but unsure how to do it.


    For instance, purchase value is 355k. She is putting in £105k and me £20k (we will split all solicitors fees, Stamp Duty etc and we have cash available for this also - she will pay all fees relating to the sale of her property) which leaves us a mortgage of £230k.


    Half of the property value is £177,500, so less deposits, her mortgage will be £72,500 and mine will be £157,500.


    I expect from here we would just say that she pays 31.52% (72,500/230,000x100) of the monthly instalments and I pay 68.48% (157,500/230,000x100) and at the end of the mortgage term, we would each own 50%.


    Can it be as simple as this and do we need to sign any deed of trust forms or anything to protect each other in case we split up? I will ask our appointed solicitors but I'd like some free impartial advice before we pay for something that might not be what we are looking for.


    Thanks for your help.


    Tubs






    Also, on a separate note I think all my other posts on here have been from when I was in 5 figure debt so it's nice to be talking about spending money for a change - much of the thanks goes to the girlfriend who is extremely prudent with money and has instilled this in me also!
Page 1
    • AndyTails
    • By AndyTails 13th Mar 17, 1:52 PM
    • 27 Posts
    • 27 Thanks
    AndyTails
    • #2
    • 13th Mar 17, 1:52 PM
    • #2
    • 13th Mar 17, 1:52 PM
    The idea of you paying more of the mortgage so that you are on equal terms at the end of the mortgage is bizarre! Normally when buying unequally you're trying to protect yourselves against the possibility of breaking up and selling the house in the short to medium term, not the long term.


    A more "normal" way to set it up is to get your solicitor to draw something up which says the first £105k of the sale price is your girlfriend's, the next £20k is yours, and the rest is split 50:50. You then pay 50:50 on the mortgage going forwards.


    The slight risk with this is if the market goes down and £40k is wiped off the value of the house, then you split up and sell, your girlfriend would get £85k and you would get nothing. But this is always a theoretical risk in any house purchase, and given the probabilities of a housing market crash coinciding with you splitting up with your girlfriend, I wouldn't be too worried.
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 1:57 PM
    • 291 Posts
    • 246 Thanks
    jonmoneybags
    • #3
    • 13th Mar 17, 1:57 PM
    • #3
    • 13th Mar 17, 1:57 PM
    if you dont trust each other, maybe buying a house together is not for you both
    • Guest101
    • By Guest101 13th Mar 17, 1:58 PM
    • 13,955 Posts
    • 13,469 Thanks
    Guest101
    • #4
    • 13th Mar 17, 1:58 PM
    • #4
    • 13th Mar 17, 1:58 PM
    Hi all,


    My girlfriend and I are about to buy our first house together.


    She has a property to sell with a big chunk of equity to use as a deposit and I have savings to put in but her share will be about 5x the amount that I'm putting in.


    We have openly talked about protecting her interest (and mine to a degree even if it is less) but unsure how to do it.


    For instance, purchase value is 355k. She is putting in £105k and me £20k (we will split all solicitors fees, Stamp Duty etc and we have cash available for this also - she will pay all fees relating to the sale of her property) which leaves us a mortgage of £230k.


    Half of the property value is £177,500, so less deposits, her mortgage will be £72,500 and mine will be £157,500.


    I expect from here we would just say that she pays 31.52% (72,500/230,000x100) of the monthly instalments and I pay 68.48% (157,500/230,000x100) and at the end of the mortgage term, we would each own 50%.


    Can it be as simple as this and do we need to sign any deed of trust forms or anything to protect each other in case we split up? I will ask our appointed solicitors but I'd like some free impartial advice before we pay for something that might not be what we are looking for.


    Thanks for your help.


    Tubs






    Also, on a separate note I think all my other posts on here have been from when I was in 5 figure debt so it's nice to be talking about spending money for a change - much of the thanks goes to the girlfriend who is extremely prudent with money and has instilled this in me also!
    Originally posted by tubsolard


    To be honest, either you trust eachother to do the right thing should you break up. IE Sell and split equitably.


    Or you don't, in which case don't get tied down to a mortgage together.
    • Pixie5740
    • By Pixie5740 13th Mar 17, 2:04 PM
    • 10,390 Posts
    • 14,228 Thanks
    Pixie5740
    • #5
    • 13th Mar 17, 2:04 PM
    • #5
    • 13th Mar 17, 2:04 PM
    Unequal deposits from co-habiting, unmarried couples has been done to death on the forum. Use the search function and you will find numerous threads by people in a similar situation as yourself and the debates that go along with them.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Guest101
    • By Guest101 13th Mar 17, 2:12 PM
    • 13,955 Posts
    • 13,469 Thanks
    Guest101
    • #6
    • 13th Mar 17, 2:12 PM
    • #6
    • 13th Mar 17, 2:12 PM
    Unequal deposits from co-habiting, unmarried couples has been done to death on the forum. Use the search function and you will find numerous threads by people in a similar situation as yourself and the debates that go along with them.
    Originally posted by Pixie5740


    Perhaps it's the pessimist in me, but reading the "Help my ex wont sell the house" thread for the 200th time makes me wonder if it's worth the hassle
    • tubsolard
    • By tubsolard 13th Mar 17, 2:38 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    • #7
    • 13th Mar 17, 2:38 PM
    • #7
    • 13th Mar 17, 2:38 PM
    If you're only going to respond to give advice about criticise our relationship then please don't waste any more of our time.


    I am naïve in the facts and protocol surrounding mortgages as I've never had one before so forgive me if my understanding of how it might work financially is wrong, hence why I'm on here asking.


    I did look at the forum and my key words didn't return any useful threads but I'll do it again and see what I can find.
    • tubsolard
    • By tubsolard 13th Mar 17, 2:39 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    • #8
    • 13th Mar 17, 2:39 PM
    • #8
    • 13th Mar 17, 2:39 PM
    Perhaps it's the pessimist in me, but reading the "Help my ex wont sell the house" thread for the 200th time makes me wonder if it's worth the hassle
    Originally posted by Guest101


    I'm not sure it's worth the hassle if I were to refuse to buy a house with her either!
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 2:41 PM
    • 291 Posts
    • 246 Thanks
    jonmoneybags
    • #9
    • 13th Mar 17, 2:41 PM
    • #9
    • 13th Mar 17, 2:41 PM
    If you're only going to respond to give advice about criticise our relationship then please don't waste any more of our time.


    I am naïve in the facts and protocol surrounding mortgages as I've never had one before so forgive me if my understanding of how it might work financially is wrong, hence why I'm on here asking.


    I did look at the forum and my key words didn't return any useful threads but I'll do it again and see what I can find.
    Originally posted by tubsolard
    ooooooooooooooo, touched a nerve
    • Guest101
    • By Guest101 13th Mar 17, 2:45 PM
    • 13,955 Posts
    • 13,469 Thanks
    Guest101
    I'm not sure it's worth the hassle if I were to refuse to buy a house with her either!
    Originally posted by tubsolard


    That wasn't quite my point.


    If you or she think that the other cannot be trusted to be reasonable and equitable in case of relationship breakdown (which to be fair is statistically likely) then you should either accept the chance of a legal battle (which still happens even with a deed of trust) or you make an alternate choice. Perhaps to rent.


    Basically being married prevents some of this, as the divorce typically sorts this out. Until that point everything is jointly owned, there is no my or yours, only ours.


    You and your girlfriend still have that mine and yours mentality, so it seems crazy to me (and it's just an opinion) that you would buy a house together.


    Now it's very common, but so are threads like this, threads about break ups after 5,10,20, 50 years, and threads about forcing a sale.
    • tubsolard
    • By tubsolard 13th Mar 17, 2:50 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    If you're only going to respond to give advice about criticise our relationship then please don't waste any more of our time.


    ---


    I'll try and explain myself a bit better next time!
    • tubsolard
    • By tubsolard 13th Mar 17, 2:54 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    ooooooooooooooo, touched a nerve
    Originally posted by jonmoneybags


    I'm not embarrassed that a "nerve" of mine is my relationship with my girlfriend it being questioned by a stranger.
    • Guest101
    • By Guest101 13th Mar 17, 2:56 PM
    • 13,955 Posts
    • 13,469 Thanks
    Guest101
    If you're only going to respond to give advice about criticise our relationship then please don't waste any more of our time.


    ---


    I'll try and explain myself a bit better next time!
    Originally posted by tubsolard


    1: Public forum, if you don't like what's said go and pay for professional advice
    2: I'm not criticising YOUR relationship, I'm saying that about anyone in the same position
    3: Split equity however you want. Pay whatever percentages you want. If you don't break up it wont matter, if you do - see my above point....
    • MyOnlyPost
    • By MyOnlyPost 13th Mar 17, 2:59 PM
    • 1,514 Posts
    • 1,020 Thanks
    MyOnlyPost
    If you're only going to respond to give advice about criticise our relationship then please don't waste any more of our time.
    Originally posted by tubsolard
    Don't think of it as criticizing your relationship, but advice from those that have been there and done it. I have bought a house with three different women over my lifetime, each time convinced that this relationship was "the one". I disagree with the others, it's all very well saying that you should trust each other to sort it out ammicably, but if anything were to happen in the future then who knows what kind of hurt or vengance would be present when trying to discuss financial separation.

    Personally I think that when dividing the ownership your partner should be entitled to assett appreciation (or possible depreciation) on her total investment, so just giving her her £105k, you your £20k and splitting the rest 50/50 is depriving her of a return on her capital and is effectively giving you an interest free loan. Instead I recommend that you each pay half the mortgage and split the ownership of the property thus

    Houes value £355k
    Mortgage value £230k
    Her Deposit £105k
    Your Deposit £20k

    Your share = ((Half mortgage + 20k ) / (355k))*100 = 38%
    Her Share = ((Half mortgage + 105k) / (355k))* 100 = 62%

    In the future you could pay down lump sums of the mortgage when able to "buy" some equity back
    It may sometimes seem like I can't spell, I can, I just can't type
    • tubsolard
    • By tubsolard 13th Mar 17, 3:04 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    That wasn't quite my point.


    If you or she think that the other cannot be trusted to be reasonable and equitable in case of relationship breakdown (which to be fair is statistically likely) then you should either accept the chance of a legal battle (which still happens even with a deed of trust) or you make an alternate choice. Perhaps to rent.


    Basically being married prevents some of this, as the divorce typically sorts this out. Until that point everything is jointly owned, there is no my or yours, only ours.


    You and your girlfriend still have that mine and yours mentality, so it seems crazy to me (and it's just an opinion) that you would buy a house together.


    Now it's very common, but so are threads like this, threads about break ups after 5,10,20, 50 years, and threads about forcing a sale.
    Originally posted by Guest101




    If both of us are comfortable and happy to sign something or come to an official, signed agreement regarding the ownership prior to committing then I don't see what the big deal is? Any question over trust, ownership issues etc are ones for us to agree/disagree on privately I'm just curious as to what options are in front of us.


    I'll accept of course that one option is not to buy a house together, but aside from that, what other options assuming we are going to buy! That's the question.
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 3:07 PM
    • 291 Posts
    • 246 Thanks
    jonmoneybags
    I'm not embarrassed that a "nerve" of mine is my relationship with my girlfriend it being questioned by a stranger.
    Originally posted by tubsolard
    dont post on a public forum then, ask your mum
    • tubsolard
    • By tubsolard 13th Mar 17, 3:08 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    Don't think of it as criticizing your relationship, but advice from those that have been there and done it. I have bought a house with three different women over my lifetime, each time convinced that this relationship was "the one". I disagree with the others, it's all very well saying that you should trust each other to sort it out ammicably, but if anything were to happen in the future then who knows what kind of hurt or vengance would be present when trying to discuss financial separation.

    Personally I think that when dividing the ownership your partner should be entitled to assett appreciation (or possible depreciation) on her total investment, so just giving her her £105k, you your £20k and splitting the rest 50/50 is depriving her of a return on her capital and is effectively giving you an interest free loan. Instead I recommend that you each pay half the mortgage and split the ownership of the property thus

    Houes value £355k
    Mortgage value £230k
    Her Deposit £105k
    Your Deposit £20k

    Your share = ((Half mortgage + 20k ) / (355k))*100 = 38%
    Her Share = ((Half mortgage + 105k) / (355k))* 100 = 62%

    In the future you could pay down lump sums of the mortgage when able to "buy" some equity back
    Originally posted by MyOnlyPost


    Thank you. This might be the way to look at it and I'd be fine with this method - hopefully she hasn't got too used to the idea of only having to pay 38% of the mortgage repayments yet as per our initial idea!
    • Pixie5740
    • By Pixie5740 13th Mar 17, 3:08 PM
    • 10,390 Posts
    • 14,228 Thanks
    Pixie5740
    I did look at the forum and my key words didn't return any useful threads but I'll do it again and see what I can find.
    Originally posted by tubsolard
    Really? Just searching for the word "unequal" brings up all these threads:

    http://forums.moneysavingexpert.com/search.php?searchid=171534868
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • tubsolard
    • By tubsolard 13th Mar 17, 3:10 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    dont post on a public forum then, ask your mum
    Originally posted by jonmoneybags


    And there was me thinking that I might have been acting a little childishly...
    • tubsolard
    • By tubsolard 13th Mar 17, 3:13 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    Really? Just searching for the word "unequal" brings up all these threads:

    http://forums.moneysavingexpert.com/search.php?searchid=171534868
    Originally posted by Pixie5740


    Thanks, I'll try again.
    I tried "Unequel Mortgage" and that didn't really bring anything up - didn't realise I needed to be more vague.
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