Help with ownership percentages

ValHaller

Serafinaaa wrote: »

If we sold the house in one year for the same amount of money and had paid back themortgage, then 57% of what was left would not be as much as I paid on the deposit and my partner would get more than he paid.

Similar discussed today here https://forums.moneysavingexpert.com/discussion/4560879

The calculation method is for the proceeds of the sale to be split between you according to equity shares and your respective mortgage shares to be taken from your shares of the proceeds.This is valid for both increases and decreases of property value.

On a sale for equal value, you get back £89,200 and your partner gets £67,800. You each pay back £62,800 on the mortgage and you are left with £26,400

Serafinaaa

Thanks everyone.

Of course we are hoping that we will never need to actually divide up the equity but it is recommended that these things are thought through in case of the worst possible scenario. We will also be thinking through whether we needs wills drawn up etc.

I don't think either of us wants to 'fleece' the other but there are so many different ways to think about ownership when different amounts are contributed that it is best to sort it out in advance just in case.

I also need to bear in mind that a large proportion of my extra deposit money is a gift from my parents and I don't think that they would be too happy if I didn't take steps to ensure it was protected as much as possible.

Thrugelmir

[QUOTE=sKiTz-0;60797019then_you_don't_want_to_walk_away_with_much_less_than_you_put_in,_[/QUOTE]

If you start with that attitude then there may well be bumps in the road ahead.

sKiTz-0

It's true. I don't mind sharing when I'm in the relationship, it's still "our house" and not "slightly more my house", while we're together then what's mine is yours etc. But should we split up then I'm sorry but what's mine is mine - why shouldn't I have it back?

getmore4less

Serafinaaa wrote: »

Hello,

I'm just about to buy my first house with my partner. We are planning to pay the mortgage equally but we are contributing different amounts to the deposit. I'm really struggling to work out what that means for the percentage that we each own!

The house is £157,000
We are paying a deposit of 20% which is £31,400
We will have a mortgage of £125,600
I am paying £26,400 of the deposit. My partner is paying £5,000.

I initially worked out that we would own something in the region of 57% and 43% but when I tried some possible scenarios where we sold the house it didn't seem to work. E.g. If we sold the house in one year for the same amount of money and had paid back themortgage, then 57% of what was left would not be as much as I paid on the deposit and my partner would get more than he paid. :think::think:

This is really confusing me... Can anyone help?
Thanks!

The correct equity split is (26400+62800) : (5000+62800) which is close to your 57:43 (56.82:43.18)

(now this is the bit you probably got wrong)

When you sell you split the sale by those % THEN pay 1/2 the remaining mortgage each.

This works for all price rises and falls and as long as you keep the mortgage payments equal it works for overpayments as well.

Any improvements/investments in the property are done on the 57:43 ratio.

I see others have pointed this out s well

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Another way to do this is to own the house 50:50 and then split the debt.

This can work well if the one with the lower deposit is the higher earner they can pay off their share of the debt faster than the lower earner.

Its quite easy to manage the debt side.

Any investment in the house is doen 50:50.