Buying House with Girlfriend - What's the best way?

squidy_the_quid

Hi,

My girlfriend and I are considering buying a house together.

We earn similar amounts but I have more substantial savings that could be put towards the house than she does.

What is the best way of purchasing together in a fair manner from both a legal and a social standpoint?

From looking around I think that a tenants in common purchase, where we both had a percentage share of the house directly proportional to the amount we'd contributed towards it would be most suitable. This would appear to be the financially fairest solution and would protect us both financially (with the smallest legal involvement) if the worst were to happen.

She however is uneasy about having a smaller share in the house than I would, thinking she would have a smaller say in what happens to it.

I do sympathise with her concerns but am not sure of a better alternative. What's the best way to purchase a house together when unmarried?

Thanks!

sarah_elton

OH and I looked into this a while ago. If you want to protect your investment in the house then yes, tenants in common with an agreement about how the equity (or debt) would be split on sale is best.

You can buy as joint tenants (the standard joint purchase method) but you're right that it would give you an equal share of the property. With joint tenants also, I believe that ownership passes to the other person if one of your dies. With tenants in common your part of the house forms part of your estate and goes to whoever your will says.

I assume you mean that she feels like it would be 'your house' more than hers - that you'd get the deciding vote on decorating etc. Can you convince her that wouldn't be the case?

If you're considering marriage in the future, could you say to her that you want this agreement about the equity split for now, but that it will be dissolved when you get married. Therefore, if and when you get married, the assets all become joint. This is what OH and I were planning to do (instead, we're now renting longer and probably won't end up buying till we're engaged so we'll go straight in as joint tenants).

squidy_the_quid

sarah_elton wrote: »

OH and I looked into this a while ago. If you want to protect your investment in the house then yes, tenants in common with an agreement about how the equity (or debt) would be split on sale is best.

You can buy as joint tenants (the standard joint purchase method) but you're right that it would give you an equal share of the property. With joint tenants also, I believe that ownership passes to the other person if one of your dies. With tenants in common your part of the house forms part of your estate and goes to whoever your will says.

I assume you mean that she feels like it would be 'your house' more than hers - that you'd get the deciding vote on decorating etc. Can you convince her that wouldn't be the case?

If you're considering marriage in the future, could you say to her that you want this agreement about the equity split for now, but that it will be dissolved when you get married. Therefore, if and when you get married, the assets all become joint. This is what OH and I were planning to do (instead, we're now renting longer and probably won't end up buying till we're engaged so we'll go straight in as joint tenants).

Thanks for your kind reply.

Yes, she's concerned that I, or possibly my parents (as some of my savings have been gifted to me by them) will use "the house is more more mine than yours" to try and swing descisions in my favour.

I have no desire to do this and have tried to reassure her that I would want both of us (and only us) to have an equal say in all descisions to do with the house.

I think her concerns lie with that it is all well and good me saying that now but if things do become strained between us then this agreement might go out the window with it.

I believe she is happy with a "tenants in common" arrangement but would prefer a 50/50 split. This would leave us with a substantually lower deposit though and would leave me with a lot of savings that I think would be better utilized getting a smaller mortgage.

Thanks!

AnnaMonkey

Hello!

I'm looking into something like this with my OH. We're going to see if we can get something drawn up saying that the property is 50:50, but that I put in £X more at the start, so if we split up and sell the place i get £X back first, and then we split any proceeds (or debts). But we haven't actually got anywhere with doing it yet.

sacol4940

My OH and me are in this same situation - he's paying for the whole of the deposit and im just paying for the solicitors fees. I think we're doing something where if we split, he gets his deposit back, then we split the rest 50/50. Not sure what this is called sorry. Im the same as your GF, i want the share of the house to be 50% each and this was something that my BF suggested and im happy with it

sacol4940

AnnaMonkey wrote: »

Hello!

I'm looking into something like this with my OH. We're going to see if we can get something drawn up saying that the property is 50:50, but that I put in £X more at the start, so if we split up and sell the place i get £X back first, and then we split any proceeds (or debts). But we haven't actually got anywhere with doing it yet.

ha ha you beat me to it! lol

squidy_the_quid

sacol4940 wrote: »

My OH and me are in this same situation - he's paying for the whole of the deposit and im just paying for the solicitors fees. I think we're doing something where if we split, he gets his deposit back, then we split the rest 50/50. Not sure what this is called sorry. Im the same as your GF, i want the share of the house to be 50% each and this was something that my BF suggested and im happy with it

Thanks for your reply.

Your solution seems to be the same as I'm proposing to my GF:

I will pay a larger amount at the beginning (larger proportion of the deposit).
We will then split the mortgage repayments 50/50 so we pay an even amount each month.

However, this will not leave us with an even share of the house, as I will have contributed more towards it and therefore have a larger percentage share. This would appear to be the same in your case as it looks as though you have a smaller share in the house than your BF (as you have contributed less - i.e. no deposit).

Financially it is fair, but is it going to cause tension to have an unequal share in the property?

Thanks!

Lakey

Have a look back at lots of threads of Boyfriend/girlfriend splits, and the mess it will get you in financially.... if you don't want to marry her why should you tie yourself up financially with her??
:money:

squidy_the_quid

Lakey wrote: »

Have a look back at lots of threads of Boyfriend/girlfriend splits, and the mess it will get you in financially.... if you don't want to marry her why should you tie yourself up financially with her??

Thanks for your reply.

To answer your question:

1. Hopefully with a tenants in common arrangement then we would not be tied up financially to such a degree that we couldn't go our separate ways without recouping our individual investments.

2. Houses are expensive and it is rather difficult to afford one by yourself, therefore pooling our resources means we can buy a house that we otherwise couldn't.

3. We wish to live together and even if we were not to buy a house together then we would face different issues. One of us buying and the other just living there rent free? One of us buying and the other paying rent to the other? Renting someone elses property? None are ideal.

Also, I'm not sure that marriage should be a precusror to financial involvement, in fact it only seems to make the financial situation more messy in the case of a break up with additional legal loops to go through.

Further, marriage is no guarantee that a relationship will last so it would make sense to take similar financial precautions whether married or not.

TeamBean_2

Thanks squidy for starting such a useful thread, my partner and I are also in the very same position, where I have come into some inheritance so am able to put this down as a deposit. My partner has been in contact with his parents to ask them for help but it doesn't look like they will be able to help him match the amount I'm able to put down. It would be really helpful to hear from people who have gone through this process, how they dealt with it legally and if it caused any tension?

I also agree with squidy on the marriage front, just because a couple is not married does not mean they are any less committed, and buying a house together is a legal process in itself...

blued

What about going 50/50 on a deposit now on a 2 year deal (for example) and you keeping your remaining savings. Then when you come to remortgage you both might be in a position where you agree using your savings to make the loan smaller is a good idea.

Also if you've never lived together I'd advise renting somewhere for the first 6 months. From experience living with someone can be very different to how you think it might be.