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shoe_gal_84

Hi All,

I'm just wondering if anyone may be able to advise me of the best way to deal with this situation.

So, my partner owns a house (£75,000 mortgage outstanding) and I pay him rent. We are now buying a house together (value £135,000). We have been able to port his mortgage across in joint names, and get an additional part of the mortgage for the extra £16,000 (inc. £1000 arrangement fee).
So, he currently has £44,000 equity in our current house which he will be transferring to use as the deposit. I want him to know that I'm not with him for his money, so would like something (think it's called a Deed of Trust) drawn up to protect his £44k.

I just wondered what the best way about it is. Once we move into the new property, we will be paying 50/50 on everything. Do we get the document drawn up entitling him to his £44k if we broke up, or to his £44k + increase in house value. If we do the latter, is it fair for me to be paying 50/50 and only receiving a smaller percentage than that?

I am also paying half of the solicitors fees, some of which are obviously for selling the house which is his.

Hope this makes sense, ask if you need anymore details.

Claire

Annisele

This is something your solicitor should be able to sort out for you.

As to what the document should say, that's really a matter for you and your OH to negotiate - he can get £44k, £44k plus increase in house value, or whatever else you agree.

Personally I think the fairest way is to think of the £44k as a percentage of the house value. That means that if house prices go up he gets back more than £44k, and if they go down he gets less.

So, if he's putting up £44k of deposit on a £135k house and you're putting up nothing*, then I'd say that on sale he should get back (44/135) or 32.5% of the house value, plus half of whatever is left after paying the mortgage. (Assuming there is enough to repay the mortgage - if there isn't, he gets nothing).

*It sounds as though you are putting some money towards this, so you might want to mess with the percentages to reflect that.

Bananamana

The usual agreement is along the lines of something like "on a sale the proceeds will be split as follows:
1. repay the mortgage
2. pay all fees
3. the first 44k to xyz
4. the remainder split 50/50

but as annisele says you can agree whatever you like