Deed of trust

Lizmorton90

Hi,

I’m looking for others opinions.

Me and my partner are buying a house together, we will equally pay the mortgage. However he is a first time buyer, has very little savings £600 worth which he will invest into the house, and so from the equity of my sale I am intending to pay the 10% deposit which is £20k and will be investing £15k into buying new things for the house / DIY like a new bathroom etc plus his £600.

I want to protect myself as it’s our first house together, we aren’t married or have kids so I just want to make sure that if we did split I can claw back my money. We do intend on getting married and having kids so the deed of trust is more for the time period before those life events.

My thoughts on a deed of trust are:

To say I get 10% more than him, this allows me to see a return on my investment should the price of the house increase
But to also say I get 15k back if there is enough equity left after paying me my 10% too

I was then wondering whether this is fair with two thoughts:

1) should I convert my 15k to an actual % so I see a return on my investment should there be enough equity ie 7.5% for a 200k house plus my 10%, so 17.5% plus my share
2) Is this fair on him, given he will be paying 50:50 to the mortgage

I did also lend him 2k which he can’t repay me (he owed me upwards of 6k originally which he has paid part of it back) so do i include that too or let it be?

Thanks in advance, Liz.

goodwithsaving

You will get so many answers to this, only you can decide what is best for you. I personally prefer 'you put £ in, you get the same £ out. Then it's split 50/50". Others seek a percentage route.


My rationale is that the deposit is needed to buy the property, but then you couldn't buy without the other person so you both bring things to the table.



What I will say is, take heed of what has happened to others and ignore all who claim it is unromantic and shows lack of trust (I have had one and it was valuable when we separated and sold). It doesn't imply any lack of trust etc. It's an insurance policy, and we don't always claim those, but when we do need them we are glad we have them!

MovingForwards

Personally? I would put money figures in rather than percentage just in case in the future the property market takes a turn for the worse.

How much of the £15k will be furniture etc compared to replacing bathroom/kitchen? Because you can specify what is yours to keep and take with you is sofas etc.

As long as you both are paying 50% of the mortgage / bills you both would be taking 50% back from the sale or buyout of the other. Obviously if one is paying more the percentage is noted according.

think carefully about registering the property as tenants in common or joint tenants as there is a big difference.

Lastly, draw up wills!