Buying house with my girlfriend

FrugalMav

Hi

I am already a homeowner and have £53k left on my mortgage, my girlfriend has now lived with me for the past year now so think its a good time to buy a house together. We have both been saving a deposit to buy house together for a few years.

She has saved about 30k
I will have 20k savings plus profit from house sale to go towards next house.

She is a great lady with her head screwed on and has already said we should have something in place to say i will be putting a bigger deposit into the next house but we both don't know how it will work? Do we get a joint mortgage or something else?

So how does it work say in worse case we spit up and i have put in 70k and she put 30k into the house. Do i just a larger % of the house final sale or do we just get back our deposits from the sale of the house and the rest of the value of the house gets split 50-50?

I guess for me to have a higher % in the house i will be paying a higher % of the mortgage so does that mean it wont be a join mortgage?

Thanks for your time and help.:beer:

ACG

Mortgage is in joint names.
The solicitor will deal with the deeds of the house and the options are tenants in common or joint tenancy - I always forget whch is which, butone of the allows you to split the property percentage wise.

An alternative would be to have the solicitor to draw up a trust deeds that split the property however you choose.

steeeb

Tennants in common. Get a deed drawn up by a solicitor specifying how its to be split etc

getmore4less

setting the ownership is the easy bit it is the exit conditions that are the hard bit.


there are two main ways to do the ownership.

get your money back and split the rest.
that is equivalent to giving the person with the smaller deposit an interest free load

Equitable shares that reflect the cash in nd the share of the debt you service.

One option is to put the same amount in and share the mortgage 50:50 making ownership 50:50

You keep your excess cash.

if the OH can afford more of the mortgage you could split that and you put more cash in.

harrpau7

Me and my girlfriend had a contract drawn up when we bought a house a couple of years ago that said in the event of a sale I would get back my initial deposit (20K) and mortgage over-payments (15K as of writing). Tricky subject to raise however it's only relevant if we ever split up. Props to your girlfriend for also suggesting it.

CouponClipper

Me and my girlfriend have just brougt a flat together. She put in a larger deposit so we decided it was a good idea to have conditions in place.

We both signed an agreement we drew up and gave a copy to both parents to keep hold off which says that we get back the % of the property we put in. Currently she's put in just over 12% and me just over 3% (Mortgage covers the rest) in the event we split she'll get her 12% and I'll get my 3% (after costs).

We also added a clause which stated when the flat should aim to be sold by and that should it be in negative equity then we remain liable for our shares still.

That % also changes depending on who decides they want to overpay the mortgage on any given month.

Juat come to an agreement you'd both be happy with in the event of a spilt. No rose tinted spectacles!

getmore4less

harrpau7 wrote: »

Me and my girlfriend had a contract drawn up when we bought a house a couple of years ago that said in the event of a sale I would get back my initial deposit (20K) and mortgage over-payments (15K as of writing). Tricky subject to raise however it's only relevant if we ever split up. Props to your girlfriend for also suggesting it.

you did not say what happens after you get your bits back Assume 1/2.

That does not reflect the equity properly.
As a model it breaks down on what is "fare".

eg £100k house £20k deposit £80k debt shared equally

House goes up £50k mortgage goes down £70k(no overpayment)

1. You get 20+((150-20-70)/2)= £50k OH gets £30k

with the OP mortgage now £55k

2. You get 20+((150-20-15-55)/2)= £65k, OH gets £30k


equity

you own 60% OH owns 40% (deposit+1/2 mortgage if paid equaly)

1. you get 150*0.06 - 70/2 = £55k OH £25k

2 you get 150*0.6 - (70/2-15) £70k OH £25k


If with the mortgage overpayments you still pay the remaining mortgage 50:50 then you are effectively providing an interest free loan to the OH of £10k + 1/2 of your extra overpayments.

you lose out when values go up OH loses out if value goes down.

The extreme example of how your model breaks down is if the mortgage is paid off immediately by you.you still share any increase even though the OH paid nothing

getmore4less

CouponClipper wrote: »

Me and my girlfriend have just brougt a flat together. She put in a larger deposit so we decided it was a good idea to have conditions in place.

We both signed an agreement we drew up and gave a copy to both parents to keep hold off which says that we get back the % of the property we put in. Currently she's put in just over 12% and me just over 3% (Mortgage covers the rest) in the event we split she'll get her 12% and I'll get my 3% (after costs).

We also added a clause which stated when the flat should aim to be sold by and that should it be in negative equity then we remain liable for our shares still.

That % also changes depending on who decides they want to overpay the mortgage on any given month.

Juat come to an agreement you'd both be happy with in the event of a spilt. No rose tinted spectacles!

This model breaks down and has not been thought through properly.

Using deposits to determine part ownership is OK as long as that is calculated BEFORE debt repayment and the rest is shared in some way.

Changing ownership with overpayments on debt is problematic as the proper calculations require valuations. you can use the value at start but that can cause issues with the distribution later.

What clause do you have that describes how overpayments change %?

Far better to just have a set amount of debt each use that to work out the equity owned and keep that fixed and then pay the debt off separately, really easy to work out the payments due after an overpayment.

getmore4less

FrugalMav wrote: »

Hi

I am already a homeowner and have £53k left on my mortgage, my girlfriend has now lived with me for the past year now so think its a good time to buy a house together. We have both been saving a deposit to buy house together for a few years.

She has saved about 30k
I will have 20k savings plus profit from house sale to go towards next house.

She is a great lady with her head screwed on and has already said we should have something in place to say i will be putting a bigger deposit into the next house but we both don't know how it will work? Do we get a joint mortgage or something else?

So how does it work say in worse case we spit up and i have put in 70k and she put 30k into the house. Do i just a larger % of the house final sale or do we just get back our deposits from the sale of the house and the rest of the value of the house gets split 50-50?

I guess for me to have a higher % in the house i will be paying a higher % of the mortgage so does that mean it wont be a join mortgage?

Thanks for your time and help.:beer:

one way to even things up is to pay the mortgage at different %.

eg. if you have £70k and she has £30k and the places costs £200k

if you split the mortgage payments £30k:£70k then you both own £100k each and own 50:50.

if that is affordable by the OH then that will work.

you make all mortgage payments at the 30:70 rate including overpayments it just works.

if one of you wants to reduce the debt it is easy to work out the new payments and it does not change the equity owed.


Many have difficulty separating the debt from the equity but they don't have to be connected.

if you think about if you both put £100k down you own 50:50.

If one of you borrowed 50k of bank of Mum and dad that would not change how you view the ownership you get 1/2 the house and pay of M&D.

Now change to a mortgage why should it be any different because the money came from a different place?