unequal share in property query

Chh566

Hi There,

Myself and my sister have purchased a property recently but I think I have miscalculated the percentage shares.

Here are the numbers:

I paid £6270 in legal fees, stamp duty, searches, survey etc. I also paid the £14,500 deposit. (Total £20,770)

The property was purchased for £289,000 and the mortgage taken out at £274,500.

My sister hasn't contributed to any upfront costs and as she earns less money we decided to split the mortgage payments and bills, so that she pays approx 40% of the monthly mortgage and bills and I pay 60%.

Please can you help me with the percentage share, so that I can amend the deed of trust? This currently says that I own 60% of the property but I recently worked out that we would get about £40k if we sold now and paid off the mortgage - this doesnt account for selling fees, as the house. We believe the house could be worth about 310,000. 60% of 40k is only 24K under 4 grand more than I put in. If we sold my sis would then get about 16K which seems alot and is more than half of the projected 20ish K equity!. I would be hoping to get about £30K .

I hope you can help me so I can amend the percentages in my deed.

Best
Charlotte

yksi

Your problem is that the percentage will change over time. The better way to handle it would have been to declare that you made her an interest-free loan of £8308 (which is 40% of the up-front costs) and that she, paying 40% of all ongoing repayments and expenses, owns 40% of equity in the property and that her loan to you must be repaid in full in the event of a sale before shares are calculated.

This doesn't give you any interest on the loaned amount but is much simpler to handle, and you probably come out about even anyway, since the sale costs can be deducted from the equity before the repayment and calculation of your share.

Chh566

Thank you. Is there any other way you think this could be simpler on a deed of trust?

getmore4less

If written properly the %ownership does not need to change over time.

If you service the debt you own the share that debt bought(paying your share of the debt from that share of ownerships)

Chh566

Thank you for your help. If you could help me by explaining in more simple terms that would be much appreciated.