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

TeamBean_2

Good point blued, the only problem with going in 50/50 and keeping the rest behind is that we probably wouldn't be able to put down a 10% deposit (obviously depending on the price of the house), even with his folks help - there is the question around whether we should leave it a bit longer or go in sooner but with unequal contributions.

We've been renting together now for about 6 years, and been together nearly 10 years, so we've had a chance to get used to each other's bad habits! We've just never been in a position to buy until now.

TeamBean_2

I just read somewhere that the agreement is called a "deed of trust", where the solicitor states how much deposit each person has put in and outlines what will happen if the two people go their separate ways...

teafiend

When my boyfriend (now husband) and I bought a house together, we were the other way round. I had the savings, but he had a higher income. We bought it with a 50/50 tenants in common agreement. I paid the deposit and we wrote an agreement between us (without solicitors, I'm not sure how wise that was) for him to pay me back a bit every month until we were even. Might that be an option?

Ultimately though, we do joint finances since we're married. We're about to move into our new house on Friday and its me thats paid the deposit again. I'm a saver and he likes cars; what can I say?! You need to be aware that you might keep getting into this position after you've moved in. You could end up amassing savings repeatedly that she can't compete with. Its a very awkward position and there needs to be a lot of trust on both sides. Best of luck though, buying a house together was definitely the right thing for me and my OH.

pinkshoes

squidy_the_quid wrote: »

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

If you earn similar amounts, how come you have savings and she doesn't? How long have you been together?

My OH and I bought as tenants in common, and we split everything 50/50 (deposit, morgage, bills etc...) as this is the only "fair" way to do it.

You could argue that if you put a larger deposit down, then as house prices are falling, it's your money that's being eaten up, not hers.

Why don't you say put £20k deposit down, then she owes you £10k, which she pays at £x per month (as fast as she can - perhaps add interest to this??). You then pay the mortgage 50/50, which means you own 50% of the property each over all.

If for some reason you split up before the £10k was paid back, you sell the house for whatever price, splitting any equity (or sharing the debt) 50/50, then she STILL owes you the remainder of the balance on the £10k.

System

I bought a house with my girlfriend in 2007, I had £10,000 to put down and she had £2,000, but I didn't go to the trouble of getting anything legal written up about who owns how much of the house.

What it does mean though, is I have excellent leverage when it comes to washing up

squidy_the_quid

pinkshoes wrote: »

If you earn similar amounts, how come you have savings and she doesn't? How long have you been together?

My OH and I bought as tenants in common, and we split everything 50/50 (deposit, morgage, bills etc...) as this is the only "fair" way to do it.

You could argue that if you put a larger deposit down, then as house prices are falling, it's your money that's being eaten up, not hers.

Why don't you say put £20k deposit down, then she owes you £10k, which she pays at £x per month (as fast as she can - perhaps add interest to this??). You then pay the mortgage 50/50, which means you own 50% of the property each over all.

If for some reason you split up before the £10k was paid back, you sell the house for whatever price, splitting any equity (or sharing the debt) 50/50, then she STILL owes you the remainder of the balance on the £10k.

Thanks for sharing your experiences.

As to the reasons that I have more in savings:

1. I am a slightly older than she is so have been saving / investing for a longer time

2. My parents have gifted me some money to put towards a house

We have been together for 2 years.

Your suggestion of paying more of the desposit that she pays back does have it's merits and I will discuss it with her.

However, my hope was that once we moved in we would have pretty much equal income / outgoings and so could split everything 50/50. This would mean we could have a shared pot that we both contributed equally to for mortgage, bills, joint savings etc. and have a roughly equal amount left over each for individual savings or to spend on ourselves and each other.

All this of course would be liable to change in the future with changes in job circumstances, marriage, children etc. but to me it seemed like a good way of getting started.

mlz1413

I heard that friends of a friend had bought a house together where the deposit and income was higher on one side and they agreed to split the house 60/40.

So the deposits were written up to be paid back in full to each party if the house was sold then any other proceeds split 60/40. I think they paid the mortgage 60/40 to keep the split fair, but all other bills were 50/50 as these are effectively running costs.

I guess it would pose problems if major works were carried out, new roof, kitchen, bathroom etc, but it's another thought the pot.

squidy_the_quid

AliceBell wrote: »

When my boyfriend (now husband) and I bought a house together, we were the other way round. I had the savings, but he had a higher income. We bought it with a 50/50 tenants in common agreement. I paid the deposit and we wrote an agreement between us (without solicitors, I'm not sure how wise that was) for him to pay me back a bit every month until we were even. Might that be an option?

Ultimately though, we do joint finances since we're married. We're about to move into our new house on Friday and its me thats paid the deposit again. I'm a saver and he likes cars; what can I say?! You need to be aware that you might keep getting into this position after you've moved in. You could end up amassing savings repeatedly that she can't compete with. Its a very awkward position and there needs to be a lot of trust on both sides. Best of luck though, buying a house together was definitely the right thing for me and my OH.

Thanks for your reply.

Luckily we share similar values and habits when it comes to spending / saving, both frequenting this site and being keen savers. Not that I'm impartial to a nice car myself!

Getting a solicitor to draw up some documents to put in writing whatever we agree upon shouldn't be a problem. I think your solution, also suggested by pinkshoes below you is a possiblity that we can talk about but I've expressed the concern I have with it in my post above.

When you first bought the house, him having a higher income but paying you back, did you have similar disposable incomes? I just don't think it would be fair for her to be paying me a lot of money each month (to pay back the extra deposit I contributed) as it would end up with me having much more disposable income than she would.

Fortheloveofmoney

When I bought with my ex he put down the deposit. We had a Trust Deed drawn up which said he got back his deposit if we split and the rest would be split equally.

This is exactly what happened when we did split and due the agreement it was fairly straight forward.

We had it written in that the agreement would be void if we married.

If she is not keen on this idea (as i wasn't) then think very carefully about the effect it could have on the relationship. I felt forced into signing and was really upset that he had thought of us splitting up. In the end he was right but I always wondered how much the agreement contributed to that as I always felt he wasn't as committed to the relationship as I was. To me it was a good as being married and we should have shared everything.

Buying a place together is a serious financial and legal commitment and if you're not 100% then rent first.

The agreement worked in my favour in the end and when we split it made things a lot easier.

LittleMissAspie

mlz1413 wrote: »

I heard that friends of a friend had bought a house together where the deposit and income was higher on one side and they agreed to split the house 60/40.

So the deposits were written up to be paid back in full to each party if the house was sold then any other proceeds split 60/40. I think they paid the mortgage 60/40 to keep the split fair, but all other bills were 50/50 as these are effectively running costs.

I guess it would pose problems if major works were carried out, new roof, kitchen, bathroom etc, but it's another thought the pot.

That's what I might go for, depends how much my boyfriend's income rises before we buy (no chance of mine rising). At the moment I earn 38% of our income, him 62% and we pay half each for rent and bills. But if the difference gets bigger then maybe we could split a mortgage accordingly. I'm not sure yet.

If you are married, can you still get a mortgage to split the house unevenly but still have it so that when one person dies, the other person gets ownership of the dead person's share? Because that means no inheritance tax doesn't it?