Gifted deposit and protecting contribution.

Homeowner2be

AnotherJoe wrote: »

Because without the gift/loan/whatever it is classified as, the OP would have no way of getting anything back, not 70% not 50% not 30%, nothing, nil, nada.

The "fairness" OP is so desperate to enforce doesn't take into account at all a very generous gift, albeit with strings, of twenty five thousand pounds making this possible in the first place.

Perhaps taking that into account, OP may regard him moving from 70/30 to 50/50 as entirely fair? Its no different to Dragons Den where the 'dragon' wants a much bigger stake in the business than one might think "fair" because they are putting their money into it in the first place and because they can say "take it or leave it".

So OP, I'd say if you dont like that condition, if you dont think its "fair" (though I do,) then dont take the money, and stay in rented *****ing your money away.

I am very grateful for the "gift" but I don't want it hanging over me forever and would like a chance to eventually have repayed my half to make us equal, thats all I want.

If it was up to me I'd save up and pay for it my self but she still lives at home and is desperate to leave and for us to get our own place, I feel like if I don't agree to all of this without any conditions of my own we won't get the money. She will be devistated if I turn round a turn the money down as it will be at least another year or two until we have a decent enough deposit to go it alone.

AnotherJoe

Homeowner2be wrote: »

That sounds like an ideal solution to me, if we weren't to go with Barclays would there be a way of releasing that money back to them when re-mortgaging after the first few years of the fixed rate?

Sure as long is there enough equity and savings and/or you can get a larger mortgage.
For example, "gift" of £25k on £250k house with £225k mortgage. 90%LTV
After 3 years you now owe £220k and house is worth £325k
Take mortgage of £245k, give £25k gift back, but LTV is now 245/325 = 75 aprox% so you'd get a better rate maybe repayments are even the same as on the £225k.

And at that point if they wish to carry forward the £25k that makes you so uncomfortable, you can insist its a straightforward gift or not take it.

[Deleted User]

AnotherJoe wrote: »

But they can get those with the appropriate agreements made up front.

I would keep it simple, the GF's parents are contributing the money so its their their right to put whatever conditions they want and OP (and GF) can accept those or walk. Getting that back if they split up seems fair to me, suppose he runs off with some floozy after a week, why should he get half of it?

However, after that, I would strongly say it should be 50/50 remaining equity irrespective of the contribution because what the heck are you doing buying together & living together if you are going to manage the finances like that? Will you have notes on the fridge regards who bought what food? Will she get an extra 2% if she cleans the bathroom every week?

Its a partnership not a couple of mates doing it for financial reasons only, and starting off on an unequal basis like this bodes very badly IMO,and leads to stuff you'll regret saying like "well its mostly my house now so we arent decorating the lounge bright red" or whatever. You dont want one person to be the "junior" partner.

This is the way my gf & I are approaching it.

My part of the deposit will be approx £20,000 more than hers. If we break up, the agreement is I get that premium back if we split by either paying her that much less for her half or she pays me that much more for my half.

If we stay together then great

As for the running costs/mortgage costs etc, I earn almost twice as much as her so it's pointless us paying equal share as she still needs a sensible level of disposable income to live and save for bits and pieces she wants. I'm happy to pay more than her as I earn more.

If we do split I wouldn't expect to get any money for this back as we will have paid a fair share all along.

adonis10

[Deleted User] wrote:

This is the way my gf & I are approaching it.

My part of the deposit will be approx £20,000 more than hers. If we break up, the agreement is I get that premium back if we split by either paying her that much less for her half or she pays me that much more for my half.

If we stay together then great

As for the running costs/mortgage costs etc, I earn almost twice as much as her so it's pointless us paying equal share as she still needs a sensible level of disposable income to live and save for bits and pieces she wants. I'm happy to pay more than her as I earn more.

If we do split I wouldn't expect to get any money for this back as we will have paid a fair share all along.

And another one here, but my deposit is £135k more than hers hence why I am eager to protect it. Again, 5 years into the relationship and don't envisage any issues, we will compromise on everything renovation wise and go halves on all running costs. Only difference is gf is going to pay 60:40 on the mortgage due to the vast difference in deposit. Will simply keep a track of mortgage payments made by both and, should anything happen, it is a very simple calculation of the proportion each has paid. The only issue would be a fall in house price as then there would not be enough equity left to repay the respective deposits and, calculated on a % basis, I'd be far worse off in absolute monetary terms. I still need to consider the best approach towards this.


Neither of us feel the need for joint accounts as we earn similar amounts so it is nice to keep that element of individuality. Some may think that sounds strange but as long as all the bills are paid and we're doing all the stuff together we want to, why should all the money be lumped together?

Thrugelmir

Homeowner2be wrote: »

I get the same but would be almost half my investment. I can't accept this.

Are you ready to settle down? You are buying a home not an investment. Without the gift are you in a position to purchase a property?

Kynthia

Did you read my post?

If you are going to make 70% of the mortgage repayments then you could own 70:30 as tenants in common. Then also have a trust deed that specifies she gets the first £25k back and the rest of the equity is split 70:30. Yes it's not perfect as her £25k is more protected for a drop in property value than your share, but also she's losing out on any interest that would normally gained on that money if it was in a savings account or invested. These aren't big risks and only apply if you split up so why not go for it?

zebulon

HappyMJ wrote: »

When you're in a relationship you jointly earn money. All money earned by either person is "our" money...that includes all the benefits you get as well. You're saying you will be making the payments from your income so therefore should be entitled to more of the house once it's sold. You need to change that to "we" will jointly be making the payment each month from "our" joint income.

HappyMJ wrote: »

You're still looking at it as if "you" are earning the money when it isn't. When you're in a relationship you earn money as a couple.

Or not!

:huh:

getmore4less

Homeowner2be wrote: »

Well I'm quickly running out of ideas, I'm trying to protect my self just as much as there trying to protect her, I've never purchased a house before and would prefer not to be signing anything that states she would be entitled to that plus half of the rest when I'd be paying more in, I would like nothing more than for everything to be 50/50 but it's never going to happen as long as we are accepting this money.

Instead of nit picking my replays and saying you think it's a terrible idea can I suggest you come up with one that isn't so terrible and is fair to both of us?

As it is I stand to lose out, we are not a couple of mates, the relationship isn't "flaky" , she's my girlfriend of 6 years and I have no doubt we'll get married shortly after getting the house.
I'm not trying to pull the wool over anyone's eyes, at the end of it all I simply want 50% no more no less as I will have contributed far more than is needed to have earned that.

Is there a way of her getting her percentage based of the 25k deposite, and I can then get a percentage based on my monthly payments until I have the same e.g. 10% that she started with and then we just go to what should be a normal situation of 50/50.

And with the monthly repayments I think it's going to be more on the lines that I pay around 70% and her 30%.

I certainly am not trying to be deceitful I just want what's fair for us both.

Thank you.

it is not the payment that counts, the interest is just the cost of not having the cash.

once you borrow it then you are paying with cahs and that share is yours.

Try this for a bit of middle ground.

Pretend the mortgage is in two parts.
One part for £25k that you pay on your own.

Now you have £25k each to start with, she gets hers for 0% from bank of mum and dad your £25k from a different lender.

You pay that from your disposable income on agreed with the OH payment schedule to get it paid off in a reasonable time say 5 years.

The rest of the debt you split based on your new income ratio which will be a bit more balanced, you can decide if this is a 50:50 equity even though you pay a bit more or some other split.

I think this would be good middle ground juts needs an affordable time frame for you to effectively overpay by £25k.

After 5 years you are equal if you split before you have to pay what remains of the £25k owing from your share of the equity that bought.

even though the loans are pretend 2 loans it is easy to do the numbers with it just being one loan.

so doing some numbers

£25k deposit A.
£25K loan 1 B
£100k Loan 2 mortgage £100k to be split


income A £1.5k B £3k on paper split is 1/2, 2/3 33.3%:66.7%

but B has is a £25k extra debt to be paid over 5 years.
25/(5*12 say £450mp(3%)

new disposable is £1500 £2550 or 37%:63%

---

Another option that achieves a similar goal is the initial £25k is split between you and B owes A £12.5k and agrees a payment plan for that.

Again the payment lowers B disposable to do the how to split the mortgage calculation until the debt is paid off.

if this go belly up you split 50:50 and pay what is left of the 12.5k from your share(they get the other £12.5k worth from their share).

The key is that the one without the deposit needs to be saving/overpaying to create an equivalent equity quicker than the term of the mortgage so reduces their effective income for any other split

getmore4less

adonis10 wrote: »

And another one here, but my deposit is £135k more than hers hence why I am eager to protect it. Again, 5 years into the relationship and don't envisage any issues, we will compromise on everything renovation wise and go halves on all running costs. Only difference is gf is going to pay 60:40 on the mortgage due to the vast difference in deposit. Will simply keep a track of mortgage payments made by both and, should anything happen, it is a very simple calculation of the proportion each has paid. The only issue would be a fall in house price as then there would not be enough equity left to repay the respective deposits and, calculated on a % basis, I'd be far worse off in absolute monetary terms. I still need to consider the best approach towards this.


Neither of us feel the need for joint accounts as we earn similar amounts so it is nice to keep that element of individuality. Some may think that sounds strange but as long as all the bills are paid and we're doing all the stuff together we want to, why should all the money be lumped together?

As long as work out the equity at the start based on deposit and debts, you keep paying 60:40 you don't need to keep track of payments the % equity does not change neither does the % debt.

You can adjust the % debt if you want to do extra overpayments without changing the equity


house price drop could leave a dangling debt but that's just the way it is.

Homeowner2be

yes i am in a possition to move out and stle down but im just trying to protect my self if it goes pear shaped i dont see why this seems to be a bad thing, or shal o just accept all conditions with none of my own, pay far more and possibly end up with less.
personaly i earn enough to save up a deposite over the course of a year or 2 but my girlfriend is that desperate to move out that she really liked the idea of taking her dads money and getting out now rather than later and im just trying to figure out a fair way of giving her what she wants without putting my self at risk.

i think im just going to accept the money and get a mortgage as tenants in common work out a monthly payment that in the end would work out to 50%.