Different percentage ownership of house by a couple?

Saver-Rob

We are currently at the stage where we would like to be getting a mortgage agreed in principle this week but are a little confused as to how you go about arranging for the house purchase to be an uneven percentage split, ie I would own 75% and her own 25% (figures just as an example).

Would this be done when speaking to and getting a mortgage agreed by the Building Society or does this have to be done through a solicitor? Which way round do you do things? If we were to split up and sell the house for less than we paid, would the debt incurred be split by the percentage that we had owned the house, ie would I be saddled with 75% of the debt and her with 25%?

The whole thing is new to me but we think it is important that we arrange this.

Any answers and help is greatfully received as this could delay things for us. Thanks alot.

2912pwil

I had a similar situation some years ago.. Think there are 2 points to address with this....

a) Getting the mortgage (good luck in these troubled times). I'd strongly suggest not confusing the mortgage provider with %ownership stuff. Poor guys probably won't understand and you may simply get the reaction of "oh, well, no deal for you then".. In your shoes I'd simply answer the questions asked on the form...

I'd approach it presenting yourselves in your best light and hope to get the de\l you need....

b) Who owns what % of the house: (or is it who owns what % of what is left when the house is sold). If % of house presumably then the mortgage contributions you each make will be in the same proportion (your example 75/25). We had (from memory) a "Deed of Interest" (Solicitor will know, think it is simple and fairly cheap) which defines the interest each has in the property. Then if you sell who gets what should be clear...


However I think you are thinking what happens if there is an overall debt on selling... dunno that one, think you need to talk to a solicitor or hope someone else here understands that question...

Cheers!

Pssst

If you are going to live together,will you eventually be 75% married also? If finances are an issue now,then you need to sort it now before getting involved with mortgages. Mortgages lenders are not interested in peripheral issues such as this and it will cause doubt and instability.

nig0609

Pssst wrote: »

If you are going to live together,will you eventually be 75% married also? If finances are an issue now,then you need to sort it now before getting involved with mortgages. Mortgages lenders are not interested in peripheral issues such as this and it will cause doubt and instability.

In your analogy, if they went equal split does this mean they would be married 50%?

Saver-Rob is only trying to safeguard his substantial deposit in the property so that if, god forbid, the relationship did not work out he would be able to get back a decent proportion of what he put in.

Nice blog Saver-Rob, makes an interesting read - sorry can't help on this one as I too also need to know this

Saver-Rob

Thanks to all posts. This is becoming the most difficult question to answer - normally the only replies I get are regarding the relationship and not actually answering my question.

So are people saying that I should actually be talking to a solicitor to address this before I get a mortgage offer, or not?

nig0609 - Thanks for the comments re my blog

Pssst

Apologies Rob but the relationship is all in the mix IMHO. Have you spoken to your partner about this issue and is she in agreement that because of your initial financial commitment,you should have a greater stake? If shes happy with that then maybe you should seek some low level legal guidance as a start.

remember thought that that legal arrangement is of no concern to the mortgage co. As fat as they are concerned,you are both signatories to the mortgage and you are both jointly and separately liable.

pinkshoes

Is there any particular reason that it can't be 50-50?

If you bought and the house dropped £80k in value, then £60k of the loss would be yours, and £20k hers if you're splitting the house 25% to 75%. You should speak to a solicitor about doing this... (likewise, if it rose £80k in value, you'd get £60k and she'd get £20k).

Have you thought about how you would also split the bills?

It's difficult not to comment on the relationship when answering this, particularly as you did ask if you'd also have to take 75% of a loss!! Perhaps the two of you are not ready to buy yet?

Saver-Rob

Hi Pssst. Yes, it is something we have discussed and she is in total agreement with. She is at Uni and works part time so her contribution financially each month wouldnt be great which is why we would want to do this for the next 2 years until she is qualified and earning/contributing equally.

The issue of payments to the mortgage company isnt a problem - I will be paying most or all of it every month for the first couple of years.

Once she is earning full time then we would be looking at putting it back legally to us owning an equal share. The plan to split it unevenly was only ever planned for as long as I was solely paying the bills, not necessarily due to her putting a smaller amount of money into the deposit.

But thanks for your advice. I am getting to the stage now where I am tempted to forget the whole issue and just go for it as a regular joint responsibility/ownership as it seems this isnt going to be the easiest/quickest thing to arrange, and time is important to us right now.

pinkshoes - Thanks for the post but once again it hasnt really gone a long way into answering my question, only commenting about my relationship.

bob79

Saver-Rob, I think you are doing the sensible thing by considering this issue now. Unfortunately, most couples do not stay together for the rest of their lives. The grown-up thing to do is acknowledge this fact and to not stick your head in the sand.

As others have said, the equity split is an agreement between you and your partner (and should probably be drawn up be a solicitor), your lender doesn't give a toss. If both of you are named on the mortgage, then you are both 'jointly and severally liable' for the full amount. Meaning they can chase either of you for the full amount.

You don't need to speak to a solicitor before you get the mortgage arranged since the bank doesn't care about the equity split.

If you are paying all the bills, why not have only your name on the mortgage? She can then be added once she has a job.

Saver-Rob

Thanks for the post bob79. I underatand what you say but she is putting a large amount of money into the house and therefore she should only fairly get a fair share if we go ahead with this. She will be contributing a couple of hundred pounds a month plus more in the holidays where she works alot more hours, so it is important she is getting a fair deal.

So you are stating that it would need to be drawn up before we get a firm mortgage offer and go ahead with it. My plan at the moment is to get a good offer in principle ASAP so we are in a position to actually make an offer on a property and then afterwards if/when successful get down to the nitty gritty with regards ownership and ultimately finding the best deal to go for. As stated in another thread, I have been told that although you get a mortgage offer in principle from one BS you are more than able to shop around afterwards and go elsewhere to actually borrow the money if you can find somewhere better.

Miss_Liquorice

Say you bought a place for £200k - you would own £150k of a house and your OH owned £50k of a house.

If the property then sold for £100k (as an example!) - you would walk away with £75k and she would have £25k from the sale of the house.

This would then mean you would be responsible for a debt of £75k and she a debt of £25k, surely? At least morally. Though as the mortgage lenders will see you both as owing them money, I think they would be pretty indescriminate if it was you paying it or her - like if the mortgage was in just your name, you would be chased for it i entireity, it would just be between you and your OH for her to pay the rest.