girlfriend offering to pay off part of mortgage

happyhappyshopper

Hi there,

my girlfriend is about to receive some funds and would like to pay a lump sum off my mortgage (lets assume £50000 towards the £100000 outstanding mortgage). She hasnt contributed to mortgage payments to date, and isnt on the mortgage.

This would have the advantage for her of investing in a property, and or me of lowering my mortgage payments considerably.

I bought the house for £70000 and would estimate the property to be worth about £250000 now, with all the equity to date having arisen solely from my own mortgage payments.

Can anyone give me some advice of how a legal agreement could be drawn up, and what it should say - i.e what would a fair stake in the current value of the house be for her, and what would be the implications for us/her of future rises/falls in the house value?

She wouldnt have sufficient income to be included on any future mortgage agreement.

Thanks in advance for your help - i just want to ensure we would both get a fair deal, and both be properly protected in the event of any future separation etc.

getmore4less

From a purely equitable point of view on value and cash injection.

£50k on a house worth £250k is 20%.

if no further contributions it stays at 20%

Any capital investements/repairs should also be funded at the 20:80 proportions.

On sale 20:80 of proceeds then you pay the mortgage off from your share.


There may be other factors that make this less than equitable but that will mainly be down to your current financial arangements, allthough she may not be contributing direclty to the mortgage are there any indirect payments like rent or a bigger share of the bills?

babyfruitella

You'd need to get a valuation of the property, & then work out what percentage your girlfriend will have paid off.

property.advert

Keep her out of it. If she wants to invest in property then let her buy a property and rent it out. If she lives at your place then you can charge her rent and a proportion of the bills and she will never have a claim over it. I would get this drawn up and have her sign it though.

If she buy a place and rents it out, then she is "saving" the cost of her living there, which is why those funds are available for her to pay rent to you. For her to pay nothing means she lives rent free whilst also renting her BTL property out (or keeping her cash). You on the other hand cannot rent your property out as both you and critically, she, are living in it.

If it goes pear shaped later on then you wil be chuffed to bits that you did it this way later on. If you let her into your property, you'll likely regret it forever.

beecher2

Oh dear, property.advert's clearly been burned in the past. Get legal advice on drawing up a document and before you go have a conversation about what you both think would be a fair deal.

property.advert

beecher2 wrote: »

Oh dear, property.advert's clearly been burned in the past. Get legal advice on drawing up a document and before you go have a conversation about what you both think would be a fair deal.

Not burned badly, just stuck with a property where the other party didn't want to play ball and had to spend time and money to extricate myself from the foolish (romantic !) decision of allowing someone onto the deeds when I had no need of their funds or support. The OP would seem to fall into that category of not needing this person's financial involvement and thus, it is best avoided.

TrickyDicky101

There are many threads on this board dealing with problems where unmarried couples split and the fallout of dealing with jointly owned property (there's plenty of threads with married couples too, but at least they've made a formal commitment and should at least be aware of the consequences). I think property.advert's advice was very sensible.

Annisele

Are you sure she doesn't have sufficient income to be included on the mortgage? So long as one partner has sufficient income - and the other one doesn't have dodgy credit - banks are usually OK with non-earning/low-earning partners being added to the mortgage.