Joint Mortgages - Calculations

northcave

Hello. I'd like to ask two questions regarding calculation mortgages fairly for joint mortgages:

1. Repayments if someone pays deposit and the other does not

Example:


Assuming a house costs £100. Assume that person A puts in £20 deposit and Person B puts in no deposit. Then if the monthly payments are £2 per month, I would assume that you calculate it on the basis that Person A has £30 share of the mortgage to pay and Person B has £50 to pay over a given period. I.e. 20 years


So if the repayment is £2. Person B would pay 62.5% which is £1.25 and Person A would pay 37.5% which is £75p.
The basis being that Person A has stumped up the deposit and therefore should only be liable for the remaining part of his mortgage to pay and the associated interest.


Have I got that about right?

2. When you come to sell

Ok so lets assume the same house which is £100 and again Person A has put in £20 initially.

10 years on you can calculate how much each person has paid off no problem. But what do you do with any capital gain? I assume you base that on the total % paid off.

ViolaLass

Would have thought it would be easier for A to get 20% of sale price plus 50% of the rest i.e. 60% total and B gets 40%.

Thrugelmir

Are you asking the questions prospectively or retrospectively?

JimmyTheWig

With your scenario I would say that they each receive 50% of the sale price.
Out of those proceeds they need to repay the remaining mortgage according to how much of that mortgage they are responsible for - i.e. in the same 62.5%/37.5% split as their repayments.

amnblog

The lender considers person A owes 100% of the mortgage and also that person B owes 100% of the mortgage.


Person A & B are best not buying together if either feels the other is on a result.