Deed of Trust

fullofcold

I feel I should be able to calculate this relatively easily but my brain has had enough!

I am putting all the deposit into the next home that we are buying. The deposit will be 23% My husband and I are buying the next place together.

We are considering a deed of trust - what is fair?
Me 61.5%
Husband 38.5%

Or am I oversimplifying things?

Thrugelmir

Worth checking with your solicitor that in the event of getting divorced. That while the court may take into account the DOT but that it is not bound by the DoT in arriving at a split of assets.

[Deleted User]

How are you splitting the mortgage payments?

How about you get the first £xx back from the sale and then split the rest 50/50?

jashdown

Deleted_User wrote: »

How are you splitting the mortgage payments?

How about you get the first £xx back from the sale and then split the rest 50/50?

I have done this previously, whereby person 1's deposit is released back to them before any other proceeds being split 50-50

Everyone's situations are different but you should absolutely protect your interests. What this does mean though is you MUST be Tenants in Common, you cannot have a Joint Tenancy with a property split in place (as far as I have always been advised)

These agreements can always be torn up at a later date for example if one of you went on maternity leave, leaving the other to pay the mortgage potentially for a few month when the balance may shift!

jashdown

fullofcold wrote: »

I feel I should be able to calculate this relatively easily but my brain has had enough!

I am putting all the deposit into the next home that we are buying. The deposit will be 23% My husband and I are buying the next place together.

We are considering a deed of trust - what is fair?
Me 61.5%
Husband 38.5%

Or am I oversimplifying things?

Also, consider the likelihood of a depressed market, if you house value went down, with a fixed % agreement (without getting your deposit out first) you may get back less than what you originally put in...

Thrugelmir

jashdown wrote: »

These agreements can always be torn up at a later date for example if one of you went on maternity leave, leaving the other to pay the mortgage potentially for a few month when the balance may shift!

Hence why both parties need to take indpendent legal advice. The DOT is a legally binding document. That can be simply disregarded at will.

fullofcold

No chance of maternity leave - We are in our 40's and most definitely do NOT want any children! We earn almost exactly the same basic and all bills are split 50/50 so essentially just need to protect my deposit and then the rest will be 50/50 as far as we want to.

fullofcold

jashdown wrote: »

Also, consider the likelihood of a depressed market, if you house value went down, with a fixed % agreement (without getting your deposit out first) you may get back less than what you originally put in...

No different to if we sold in a depressed market anyway so I'm not overly concerned about that because I would then need to buy in that depressed market.

getmore4less

Don't forget the starting point includes all costs not just the deposit.

On 23% with mortgage 50:50 the equitable split( before taking of the mortgage debt) would be 23% then 77% split 50:50 61.5:38.5.

Day one with buying and selling costs you are going to be down if you had to sell.

The other common way to do it which might be simpler is you get your deposit back.
That is the same as you lending the hubby 1/2 your deposit on an interests free basis.

You split the proceeds 50:50 and he pays you back from his share.

fullofcold

Good point. I had forgotten to consider the moving costs