Unequal share in ownership

LinasD

Hello,

I am looking for help in this situation if anyone can confirm:

Me and my girlfriend are looking to buy our first flat in London. We would be taking a shared mortgage and repaying it 50/50. Having said that, we would be looking to have ownership of the flat itself in parts 1/99%. Is this easy to arrange, is [FONT=&quot]declaration of trust needed or?

Thanks for your help [/FONT]

foxy-stoat

Yeah, declaration of what you propose and both sign it.....to what end though? It wont mean anything to the lender and I pity the poor sap who is the 1% of ownership when they are paying 50% of the mortgage and be 100% liable for the debt.

LinasD

Hi,

Thanks for your response. My girlfriend has a large deposit towards the flat and for me, paying for the mortgage would be the same as paying rent now. So lets say I would be happy with my 1% share, my question was simply if it could be done....

If we were to not live together in future, we would change the mortgage repayment to her name in full I was thinking.

Pixie5740

LinasD wrote: »

Hi,

Thanks for your response. My girlfriend has a large deposit towards the flat and for me, paying for the mortgage would be the same as paying rent now. So lets say I would be happy with my 1% share, my question was simply if it could be done....

If we were to not live together in future, we would change the mortgage repayment to her name in full I was thinking.

It's up to you but owning the property as tenants in common with a 99:1 split does not sound fair or equitable to me even if your girlfriend is supplying the deposit. Use the search function on the forum; there are plethora of other threads from people in your situation and how the ownership should be split.

If there comes a time when the relationship breaks down it's not as simple as just changing the names on the mortgage. Your girlfriend would need to be able to demonstrate to the lender that she can meet affordability on her own.

Tom99

[FONT=Verdana, sans-serif]99/1 is not the way to go. You need a two part formula.[/FONT]

[FONT=Verdana, sans-serif]Lets assume the total price incl fees, stamp duty etc is split 50% GF deposit and 50% mortgage which you are paying 50/50.[/FONT]

[FONT=Verdana, sans-serif]Your deed of trust should say something like this:[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]On the sale of the property and after paying all fees and redeeming the mortgage the proceeds will be split:[/FONT]

[FONT=Verdana, sans-serif]GF – 50% of the gross sale price less sale costs plus 50% of the remainder[/FONT]
[FONT=Verdana, sans-serif]You – 50% of the remainder[/FONT]

[FONT=Verdana, sans-serif]That way your GF gets her 50% equity back 1st then you split what's left 50/50.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]So on day 2 when none of the mortgage has been repaid and the value is the same you will get nothing back.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]But by say year 25 when the mortgage is paid off your GF will get back 75% of the sale price and you will get 25% ie you will get half of what the mortgage paid for.[/FONT]