Buying A house with new girlfriend

Anthony_Delagua

Hi All,



I am buying a home with my girlfriend. The property price is £293,000 and I am putting down a £75k deposit. I am also paying for all legal fees and furnishing costs which I have set aside a further £15k. My girlfriend says she can afford to contribute £600 per month to include payments for bills and mortgage, This would mean I would contribute £800 per month. My girlfriend has no savings but to purchase a property we both like we need to have the mortgage together.



What is the best way to protect my money? I have been told I should get a Declaration Of Trust written up.



When it comes to equity in ownership what is the fairest way of doing so?


Any feedback would be much appreciated.


Thanks,

Maxwell007

Good Luck you must really must Love and Trust your girlfriend if she bring zero deposit or cash to the table. . . and your going to be paying extra per month wow,



Just wait until she has 25% to match your 25% so it’s an even split or wait and do it yourself,



Your going to need legal help to protect what's your is the simple answer.



you don't want tobe 5years in and you could be left with nothing and moving bk to your parents’ house. .

getmore4less

plenty of threads on here many come after the event with problems so you can read those and not fall into the same traps.

Equity shares is the fairest
cash inputs + amount of mortgage debt you service each

use FULL COSTS of buying include all fees.

EG.
on £300k with 25%(£75k) cash input and a mortgage of say £225 @ 2.5% over 25years about £1000pm so £600pm & £400pm if £200pm difference.

you own 25% + 75%*600/1000 =70%
OH owns 75% 400/1000 = 30%

when you come to split proceeds yo get 70% of net before the mortgage and OH get 30%.

You pay of 60% of the mortgage they pay off 40%

any maintenance/improvements get split 70:30
any overpayments get split 60:40

(substitute real numbers, think about adjusting the mortgage split to make the ownership round %)

This works for all values of deposit, mortgage split, house value going up or down and improvements.


That's the easy bit of a deed,

the hard bit are describing the rules for events, like death, splitting up, kids, buyouts etc.


Remember with the costs of buying and selling you are down from the start.

edit:
Just though if you go for a longer term and overpay you can split the mortgage payments a lot easier as long as you can both afford a bit more

eddddy

Anthony_Delagua wrote: »

Buying A house with new girlfriend

Well, I guess that's one up on "Buying a house with a swimming pool".

Is it a new type of incentive that house builders are offering?

Comms69

WHY? seriously why?


If she's a new girlfriend, why not rent?!

hazyjo

Does sound a bit like you 'need her on board' in order to get the property you want.


I seriously hope that doesn't come back to bite you if you do split up. Chances are if you can't afford it on your own now, you won't be affording it within the next year or two (if you last that long). You would probably be forced to sell as the lender still wouldn't grant you a mortgage on your own. With the risk of property prices falling around Brexit, I'm not sure I'd risk it. Should be okay re negative equity with 25% deposit, but who knows what the future holds...


Would recommend buying cheaper alone, or waiting a year and then thinking about buying with her.


Mind you, how new is 'new'?

ben-dover

How new is this GF?

Myself and Mr's Dover started with nothing, an equal amount of zero, over the years kids etc means I've paid probably paid double but what we have together was built from nothing.

Sort the legal side out, a very good friend of mine was in a similar predicament to yourself, he's well off. He wanted protecting legally if it all went tits up, his GF saw it as a lack of trust and they parted ways not long after.

DigForVictory

Welcome to MSE, the forum of enthusiastic doubters.

In a word, Don't.

Were one of my lads looking to buy & needing a girlfriend to keep the funds ticking over but said wench brought nothing else to the deal, I'd be reaching for a firehose of cold water.

Indeed I do wonder what your gf's parents are proposing to offer, if anything, as you are proposing putting your financial neck on the block.

For that amount of money a half-hour chatting with a lawyer is worth every minute.

Tom99

[FONT=Verdana, sans-serif]Since you have unequal deposits you need a two or three part formula rather than a straight %age split.[/FONT]

[FONT=Verdana, sans-serif]Lets assume you are paying a total of £300,000 incl all fees and Party A contributes £75,000, Party B £0 and £225,000 is the initial mortgage amount. Lets also assume you are going to pay the mortgage 60%/40%[/FONT]
[FONT=Verdana, sans-serif].[/FONT]
[FONT=Verdana, sans-serif]So Party A has paid for 25% (75/300) up front and Party B 0% up front.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]You will own the property as T in C and your DOT will say something like this:[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]On the sale of the property and after paying the sale costs and redeeming the mortgage the proceeds of sale shall be split as follows:[/FONT]

[FONT=Verdana, sans-serif]Party A – 25% of the gross sale price less costs of sale[/FONT]
[FONT=Verdana, sans-serif]The remainder – Split 60%/40% between Party A and B[/FONT]

[FONT=Verdana, sans-serif]The above formula is dynamic and the exact %age of the net proceeds each party gets will vary over time as the house increases in value and the mortgage is paid off.[/FONT]

[FONT=Verdana, sans-serif]Eventually when the mortgage is paid off the house will be owned:[/FONT]

[FONT=Verdana, sans-serif]Party A – (75/300 + 225/300*0.6) = 70%[/FONT]
[FONT=Verdana, sans-serif]Part[/FONT][FONT=Verdana, sans-serif]y B[/FONT][FONT=Verdana, sans-serif] – (0/300 + 225/300*0.4) = 30%[/FONT]

FreeBear

Don't forget to take in to account the day to day running costs - Who will pay council tax, gas, electricity, & food. If the OP is paying for everything, it will eventually end in tears.

foxy-stoat

Rent for a couple of years, if your still together then buy together. Hopefully in that time she would of saved up a bit as well.

In the event you where to split then the only option will be to sell as you cannot afford it on your own.