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    • 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 2
    • tubsolard
    • By tubsolard 13th Mar 17, 3:14 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    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.
    Originally posted by tubsolard


    Probably helps also if I spell "unequal" correctly!
    • Pixie5740
    • By Pixie5740 13th Mar 17, 3:15 PM
    • 10,591 Posts
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    Pixie5740
    However you decide to go about things make sure you get it all written down.
    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, 3:16 PM
    • 14,477 Posts
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    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.
    Originally posted by tubsolard


    No issue, it's your life, do as you wish.


    It's like pre-nuptial agreements (which aren't enforceable blah blah) it's hardly saying 'I trust you' is it?
    • tubsolard
    • By tubsolard 13th Mar 17, 3:24 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    No issue, it's your life, do as you wish.


    It's like pre-nuptial agreements (which aren't enforceable blah blah) it's hardly saying 'I trust you' is it?
    Originally posted by Guest101




    Well, it's more of a "I love you, but don't f*ck me over if we split up" I can live with that.
    • Guest101
    • By Guest101 13th Mar 17, 3:26 PM
    • 14,477 Posts
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    Guest101
    Well, it's more of a "I love you, but don't f*ck me over if we split up" I can live with that.
    Originally posted by tubsolard


    I hate to be pedantic (well that's not strictly true) -


    "I love you, but don't !!!! me over if we split" - is actually what I'm saying - ie doing it on trust.


    What you're (or shes saying) saying is "I love you, but I think you might !!!! me over if we split, so I'd like you to sign these legal documents"
    • tubsolard
    • By tubsolard 13th Mar 17, 3:38 PM
    • 30 Posts
    • 6 Thanks
    tubsolard
    I hate to be pedantic (well that's not strictly true) -


    "I love you, but don't !!!! me over if we split" - is actually what I'm saying - ie doing it on trust.


    What you're (or shes saying) saying is "I love you, but I think you might !!!! me over if we split, so I'd like you to sign these legal documents"
    Originally posted by Guest101


    From the outside I can understand why it may look like this.


    But circumstances, history, personal experience and personality all make a difference.


    I know why she mooted the idea (it's not necessary for me to go into detail on here) and I'm completely comfortable with protecting her financial interests and making sure she's happy.
    • Guest101
    • By Guest101 13th Mar 17, 3:42 PM
    • 14,477 Posts
    • 14,150 Thanks
    Guest101
    From the outside I can understand why it may look like this. - Good, I'm glad you can see where I'm coming from.


    But circumstances, history, personal experience and personality all make a difference. - of course, it's what drives us as human beings. It's a sad fact that on average a relationship in the UK will last 2 years and 9 months and that 42% of marriages end in divorce.


    I know why she mooted the idea (it's not necessary for me to go into detail on here) and I'm completely comfortable with protecting her financial interests and making sure she's happy.
    Originally posted by tubsolard


    That's fine, best of luck to you in your endeavours.
    • cashbackproblems
    • By cashbackproblems 13th Mar 17, 3:45 PM
    • 1,675 Posts
    • 640 Thanks
    cashbackproblems
    TBH if I was in her position I would want my interests protected contractually, otherwise would not buy a place with you.


    As mentioned have a contract drawn up stating you get back what you paid in upon sale and going forward its 50-50 that makes it easier.
    • Flugelhorn
    • By Flugelhorn 13th Mar 17, 3:54 PM
    • 575 Posts
    • 783 Thanks
    Flugelhorn
    problem is that life can change - we each had a house when we married, cost about the same but when we sold them mine made about 18k and DH made about 25k - so could be thought of as unequal deposits on the next property.
    We have moved a few times since and at times DH has paid for just about everything (maternity leave and very part time working) then he looked after the kids and I have earned all the money. Goodness knows who has put what into the joint property and savings pot.
    Can understand the need for an agreement early on but have to be flexible - I have seen a few friends struggling to have "joint funds" even after many years of marriage
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 3:56 PM
    • 291 Posts
    • 246 Thanks
    jonmoneybags
    From the outside I can understand why it may look like this.


    But circumstances, history, personal experience and personality all make a difference.


    I know why she mooted the idea (it's not necessary for me to go into detail on here) and I'm completely comfortable with protecting her financial interests and making sure she's happy.
    Originally posted by tubsolard
    have you been caught doing the dirty with the milkman in the past. tut tut
    • Guest101
    • By Guest101 13th Mar 17, 3:57 PM
    • 14,477 Posts
    • 14,150 Thanks
    Guest101
    problem is that life can change - we each had a house when we married, cost about the same but when we sold them mine made about 18k and DH made about 25k - so could be thought of as unequal deposits on the next property.
    We have moved a few times since and at times DH has paid for just about everything (maternity leave and very part time working) then he looked after the kids and I have earned all the money. Goodness knows who has put what into the joint property and savings pot.
    Can understand the need for an agreement early on but have to be flexible - I have seen a few friends struggling to have "joint funds" even after many years of marriage
    Originally posted by Flugelhorn


    Marriage means everything is joint. That's the legal position. people who struggle with that are usually deluded.
    • hanfrangipane
    • By hanfrangipane 13th Mar 17, 3:59 PM
    • 191 Posts
    • 83 Thanks
    hanfrangipane
    From the outside I can understand why it may look like this.


    But circumstances, history, personal experience and personality all make a difference.


    I know why she mooted the idea (it's not necessary for me to go into detail on here) and I'm completely comfortable with protecting her financial interests and making sure she's happy.
    Originally posted by tubsolard

    I definitely see where you are coming from Tubs.


    I don't know much about the specific legalities or drawing up official documents, but I agree with the calculation that was suggested by MyOnlyPost, for what it's worth.


    Regarding the comments on trust/relationships etc, I think it is just helpful in these situations where there isn't anything legal, such as marriage, which defines what a usual equitable split is via divorce to have something written down which underlines what you both agree would be fair in the unfortunate situation where something might happen down the line. As Guest has said, unfortunately these things are more common than we would like to think!


    Personally, I purchased a house a few years ago and my boyfriend at the time lived with me and contributed to the household bills etc. He also paid for a fair amount of furniture as his contribution to us living together as he couldn't be on a mortgage at that point for a few different reasons. We agreed between us that should we break up, I would buy him out of the furniture purchased but that he wouldn't get any of his contributions back (I paid for all the upkeep of the house too). Anyway, the specifics of our split aren't particularly relevent other than to say that when we did break up 18 months or so into living there, emotions were clearly running high and it was much easier to refer back to what we had agreed when we were both level headed.


    All big commitments like this are entered into from a place of trust. I trust my current partner and we will likely purchase a house in the next couple of years and I will be doing a similar agreement again. He will be on the mortgage so I'll probably go down a more formal route and we both agree we will feel happier having it agreed in advance. Doesn't mean we don't trust each other, just that we are realistic that you can't foresee specific relationship breakdowns in advance so it just future proofs things a bit just in case but allows us to work towards building a future together should the relationship go as we are both hoping it will!


    Doesn't really help you with the formal bits you asked about but just thought my experience may help coming from someone who has done this in the past.
    • getmore4less
    • By getmore4less 13th Mar 17, 4:00 PM
    • 29,130 Posts
    • 17,421 Thanks
    getmore4less
    Equity based on debt servicing works and is as simple as you think it might be.

    As long as you don't try to change it, when you overpay the debt you adjust the payments going forward.

    It must works.

    When selling you split the money before paying the shares of the debt.

    Include all upfront costs in the purchase price they form part of the deposits paid.

    (some don't understand why this works, just pretend you borrowed the money separately,)
    Last edited by getmore4less; 13-03-2017 at 4:08 PM.
    • getmore4less
    • By getmore4less 13th Mar 17, 4:06 PM
    • 29,130 Posts
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    getmore4less
    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.
    Originally posted by AndyTails
    Which is a very poor way, not equitable or fare.
    • alex_163163
    • By alex_163163 13th Mar 17, 5:03 PM
    • 143 Posts
    • 93 Thanks
    alex_163163
    You can definitely get something legal drawn up. I am in the same position currently in that I am contributing more deposit than my boyfriend. It's not that I don't trust my boyfriend and I pray to god we don't split up, ever! But in case we do in the near-ish future, we have decided between us that we will each get our initial deposit sum back, and split any future gained equity as we will be paying the mortgage 50:50. I know this may get muddled by marriage, children, maternity leave etc in the future but for us that is 5years or so off. So for now this arrangement works for us, and we will relook at it in the future when we need to.

    We have instructed our solicitor to draw up a declaration of trust, for an additional fee (£150). However not all conyenancers offer it so you may have to find another solicitor to do this bit - just ask yours first.
    • leslieknope
    • By leslieknope 13th Mar 17, 5:24 PM
    • 196 Posts
    • 264 Thanks
    leslieknope
    i don't think it's a bad thing to want to protect your interests. we go into relationships with the best will in the world but we can't always know what the future will bring!

    i would suggest you discuss it with her and just get something officially written up. personally i would suggest paying an equal amount of the monthly mortgage and if you ever split up, she would take the larger share to reflect her deposit. so you would get the 30 odd % and she would get the 60 odd %. or she would get her deposit and you would get yours, and then halve the remaining between you. but whatever works for you both and whatever you are both comfortable with really. i don't think there's a wrong or right way to do it as long as you're in agreement and get it written up.
    CCCC #33: £42/£240
    DFW: £4355/£4405
    • cashbackproblems
    • By cashbackproblems 13th Mar 17, 6:07 PM
    • 1,675 Posts
    • 640 Thanks
    cashbackproblems
    Marriage means everything is joint. That's the legal position. people who struggle with that are usually deluded.
    Originally posted by Guest101

    not if you have the correct legal contracts or have your parents having a charge over the property etc.
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