Buying a house - what is a fair split between partners?

Rigidrodney

First time poster so be kind.

Rigidrodney

A few more details perhaps...
My partner and I are buying a house. I am putting in all the deposit (25% of the property value) and the mortgage is just in my name as my girlfriend has a poor credit rating whilst mine is good.
She will pay a percentage of what she earns (less than me) towards the outgoings of the house. She supports me in many ways other than financial, e.g. cooking and cleaning and general house duties.
We think we should make an agreement in writing about who gets what if we should split up. We have agreed that I will get 25% of the value due to the deposit I put in, but if there is any equity left, what should the split be? She is saying it should be 50/50. I'm not sure. Thoughts please?

G_M

What do you mean by 'partners'?

Business partners? Any split which is reflected in the % of the property ownership.

Romantic partners? Bear in mind that joint property ownership is a bigger commitment than marriage. Are you commited enough for marriage?

Yes? Then the question is irrelevant as you are tying yourselves together for life...! "What's yours is mine".

No? Then don't joint buy.

Rigidrodney

Thanks G_M. She is my romantic partner so I will have a think about things. We dont want to get married (she has been there before) but I think we are pretty committed to each other nevertheless. So we move in to this house and you think, everything I own becomes hers?
Cor!

Cheeky_Monkey

Hi

First of all - you and your partner are not buying a house ........... you are!

She is not contributing in any way to the purchase and would appear to be merely contributing her fair share towards the bills. In those circumstances, I would say that she is not entitled to any of the equity when you sell.

Oh and by the way, you make her sound like your servant!

G_M

Rigidrodney wrote: »

...
My partner and I are buying a house. I am putting in all the deposit (25% of the property value) and the mortgage is just in my name as my girlfriend has a poor credit rating whilst mine is good.
If the mortgag is just in your name, so will the house be. You cannot have different names on the Title Deeds and the mortgage
She will pay a percentage of what she earns (less than me) towards the outgoings of the house.
In other words, she pays you rent.
She supports me in many ways other than financial, e.g. cooking and cleaning and general house duties.
If she does more than 50% of the house stuff, pay her a house-keeping allowance!
We think we should make an agreement in writing about who gets what if we should split up. We have agreed that I will get 25% of the value due to the deposit I put in, but if there is any equity left, what should the split be? She is saying it should be 50/50. I'm not sure. Thoughts please?

I agree with cheekymonkey.

She is paying rent to be a lodger. Just as if she were renting a room in a stranger's house.

The fact that you are sleeping together is incidental and un-related.

Unless

the percentage of what she earns

that she is paying you is considerably more than average rent in the area. Is it? Have you looked at how much she would have to pay for a room in a similar property in the area if she rented privately?

Sooki

My other half owns the house (it was his before we met so slightly different) his house, our home. We are not married, yes I would be stuck if we split up but I don't see my financial security as a reason to get married. I tend to buy the furniture but we choose together. We are happy as we are.

If the house is in your name with your 25% deposit it is your house nobody else's, you can spin any line to each other you like but at the end of the day it's yours. If there are children involved then I can kind of understand, but in your shoes I'd be slightly apprehensive why if she doesn't want to get married why she is so eager about what she gains from splitting up especially if she has financial issues.

The best thing I could suggest and the thing that concerned me is what happens if he goes first as we are not married I have no rights unless there is a will in place, maybe you could suggest this as a compromise and if you split up just change the will. Simple.

greenjellybean

Funnily enough, my partner and I are in the same boat although the genders are reversed! I (female) am putting all the deposit down on our/a new house using equity from the flat I bought before I met my boyfriend.
We too have discussed drawing up a contract about who has funded what. It seems very mercenary but perhaps sensible. Does he pay 'rent' and does he have a right to anything if we sell?
Does it make a difference if it is the male or the female putting down the majority of the dosh?

BitterAndTwisted

Gender makes no difference.

Any couple who are going to buy a property putting unequal amounts into the depoist and making an unequal contribution towards the mortgage payments should be prepared to think the unbtinkable. Because statistically the relationship will end before the mortgage-term. The time to squabble about who gets what is before the purchase and not after the relationship ends.

As for the OP: putting down a 25% deposit and having that buy you 25% of the value of the property is fair. Whether your partner's more modest contribution towards the outgoings and that buying her 50% of the balance might look fair now but it might not in a couple of year's time. Ask her where she is going to get the money from if you split at some point in the future and the property has dropped in value like a stone and consequently her 50% "share" is negative. How fair would that 50/50 look to her then?

Soot2006

Is there no way your OH could be on the mortgage/deeds?
Would you want her to be?

If not, then it is your house and your equity. However, you do not need to be married for her to be entitled to a share of the house. If she pays anything conceived as mortgage contributions, then they could be seen that way by court - as above, the time to determine things is beforehand; i.e. what % of the mortgage is she paying = the % of equity leftover after deposit returned she should probably be entitled to ... A deed of trust would be a good way to go to make everything crystal clear before the purchase ....

My OH and I went into it with the agreement that if we sold/broke up

We would get our initial deposit contributions (or equivalent equity % if value dropped that much) first and then 50/50... Neg eq unlikely due to size of deposit, however it's in the deed of trust that if this was to happen and we still wanted to sell, then we'd share the debt 50/50.

Kynthia

If you're not married then you haven't legally joined your assets. If you aren't prepared to marry each other then you both need to accept that legally you are two individuals, the fact you are romantically together is irrelevant. If you split up and one of you wasn't happy with the division of assets then you would need to take it to court and argue the case as there is no set law for non-married break-ups. Therefore both of you need to protect yourselves and it's not unromantic to be financially sensible, especially with as big a committment as a property and mortgage.

It might be a good idea to speak to a solicitor who does cohabitation agreements. They can help you think of possibilities and scenarios that you haven't, and make the agreement legal. Any agreement about equity should go both ways, whether the property increases or decreases in value.

Regarding the 25% deposit, are you saying after the mortgage is repaid you will take 25% of the sale value and then discuss how to split the rest? What if the value decreases; will you be happy that your 25% is less than the deposit you paid or will you insist that you will take the higher of your deposit amount or 25%?