Buying a House with Unequal Deposits?? Ownership of Property

dale01

My partner and I are buying a house with different deposit amounts.

We have been looking at the different agreements you can do to make it all legal incase we split in the future or one of us dies!!

The 2 options we have seen are:-

Joint tenants - this only seems to apply to equal deposits but if one of us dies the share of the house gets passed to the partner. This is what we want if one of use dies.

Tenants in Common (Unequal Share) - This is good as it covers us for unequal deposits but it seems to state in percentage %. We were looking at quoting figures, as we will be paying the same amount to the mortgage each month.
But if one of us dies then you need to have a will in place aswell as it will not automatically go to the other partner.
It also mentions about setting up a deed of trust to set all this out aswell.
Just seems to be getting really expensive to get everything legit.

To sum it up, we want an agreement with the following:-

1. Unequal Deposits agreed as £ figures. Not %
2. If one of us dies the share gets passed to the other partner.
3. If we split we want to get back the deposits that we put in and any profit split 50/50.
4. We will probably be getting married in a few years time and we still would want to keep our shares defined as above, what then??

Thanks

LandyAndy

dale01 wrote: »

My partner and I are buying a house with different deposit amounts.

We have been looking at the different agreements you can do to make it all legal incase we split in the future or one of us dies!!

The 2 options we have seen are:-

Joint tenants - this only seems to apply to equal deposits but if one of us dies the share of the house gets passed to the partner. This is what we want if one of use dies.

Tenants in Common (Unequal Share) - This is good as it covers us for unequal deposits but it seems to state in percentage %. We were looking at quoting figures, as we will be paying the same amount to the mortgage each month.
But if one of us dies then you need to have a will in place aswell as it will not automatically go to the other partner.
It also mentions about setting up a deed of trust to set all this out aswell.
Just seems to be getting really expensive to get everything legit.

To sum it up, we want an agreement with the following:-

1. Unequal Deposits agreed as £ figures. Not %
2. If one of us dies the share gets passed to the other partner.
3. If we split we want to get back the deposits that we put in and any profit split 50/50.
4. We will probably be getting married in a few years time and we still would want to keep our shares defined as above, what then??

Thanks

I doubt it.:(

PhoenixLynx_<3

Seems it can be done, we want the same thing check out 'Can we buy a property in unequal shares' on The Guardian-Money online to see how it works, Good Luck

Nixer

Are you sure you want to split the profit after deposits 50/50? It's not really fair on the person with the higher deposit but I guess it doesn't matter if it isn't substantially higher/they don't mind.

CLAPTON

of course you need to consider what you do if there is a loss and not a gain.

Richard_Webster

of course you need to consider what you do if there is a loss and not a gain.

Quite.

Do you also then split the loss 50/50? In this case the one who put in less will eventually owe the other money if there is insufficient to refund the "deposits" put in by each. Is this realistic? Where is the other one going to get the money from?

I am not sure it is appropriate to protect these "deposits" in this way -both are investing in something which may go down or up so they should share profits and losses in proportion to heir investment.

You have to be ruthlessly logical in applying your chosen formula to all kinds of possible future scenarios and see if the result is still "fair".

Take one example. Couple buy house for £200K. X puts in £100K capital. They take out joint mortgage (they have to do this normally if jointly owned property- but Y agrees to pay the mortgage entirely). Mortgage payments £500 per month. They agree that if place sold X gets his £100K back and X and Y will share any "profits" over that.

Suppose property prices are rising. 6 months later they split up and sell and realise £240K. X has put in £100K and Y has put in 6 x £500 = £3K. On formula agreed X gets £120K out and Y £20K. Y has done really well - £3k grows to £20K! Shouldn't the proportions be 100:3?

The point is that if you don't think it through properly and something goes wrong later then with things turning out in an unexpected way, there will be an almighty row about what each of you thought you had agreed.