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Joint house purchase differing deposits
anoriginalusername
Posts: 21 Forumite
Hi,
Was wondering if you could help me out with a bit of a brain freeze.
My partner and I are going to purchase a house with different deposits. We want it to end up being 50/50.
Interest only mortgage. £250,000 property.
30% deposit in total.
Partner A will contribute £50,000 deposit. (two thirds)
Partner B will contribute a £25,000 deposit. (one third)
That means Partner A will need to borrow £75,000 (42% of borrowing). Partner B will need to borrow £100,000 (57% of borrowing).
This means that Partner A will contribute 42% of the mortgage repayments. Partner B will contribute 57%. We then have 50/50 ownership.
The question is: what happens when we divide up the appreciation. Is that also 50/50?
Was wondering if you could help me out with a bit of a brain freeze.
My partner and I are going to purchase a house with different deposits. We want it to end up being 50/50.
Interest only mortgage. £250,000 property.
30% deposit in total.
Partner A will contribute £50,000 deposit. (two thirds)
Partner B will contribute a £25,000 deposit. (one third)
That means Partner A will need to borrow £75,000 (42% of borrowing). Partner B will need to borrow £100,000 (57% of borrowing).
This means that Partner A will contribute 42% of the mortgage repayments. Partner B will contribute 57%. We then have 50/50 ownership.
The question is: what happens when we divide up the appreciation. Is that also 50/50?
0
Comments
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You split the proceeds(before mortgage paid off) 50:50 and then pay off the % of the outstanding mortgage each.
(you don't take the deposits back)
interest free! do you mean interest only.
what makes you think there will be any profit?0 -
You dont pay " capital gains TAX " on the profit you make from any increase in value in your home!
Where do you get an interest free mortgage ?0 -
anoriginalusername wrote: »The question is: what happens when we divide up the capital gains. Is that also 50/50?
Is this an investment property?0 -
I did mean 'interest only'. I am betting that there will be a profit.getmore4less wrote: »You split the proceeds(before mortgage paid off) 50:50 and then pay off the % of the outstanding mortgage each.
(you don't take the deposits back)
interest free! do you mean interest only.
what makes you think there will be any profit?0 -
I understand that. I changed 'capital gains' to 'appreciation' for clarification.You dont pay " capital gains TAX " on the profit you make from any increase in value in your home!
Where do you get an interest free mortgage ?
No, residentialThrugelmir wrote: »Is this an investment property?0 -
What happens is what you decide. Best to decide before hand and freeze the agreement in a trust deed. This topic has come up twice in the last few daysanoriginalusername wrote: »... The question is: what happens when we divide up the appreciation. Is that also 50/50?
How to split house & mortgage 3 ways when 1 person isn't contributing toward deposit?
Deed of trust calculationHi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
The key is any algorithm should work for all values of deposit, mortgage, profit, loss.
There are are only a couple of options(and variations) that actualy do this.0
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