Mortgage deposit

ban237

My partner and I are buying a house together. I am putting in around 80% of the deposit. 

We will be paying the mortgage equally so we want to be joint tenants. However, we both want to have it recognised that if we do ever split or sell the property, I would get the same amount I paid into the deposit back first as it it quite a lot, and then split the remaining equity or profit on the house 50/50. 

I have spoken to the solicitor about this who says that for this to happen we have to be tenants in common and I would need to take an 80% share of the house. 

I don’t see how this is fair on my partner as we want to pay all mortgage payments etc 50/50. 

Has anyone experienced anything similar? 

i don’t think my solicitor understands what I’m asking, I thought it was a declaration of trust but she states this would be a contradictory document to the mortgage. 

In essence all we want is an agreement that we get back what we paid in before splitting the rest. 

Thanks 

jamielutz1987

As you correctly day, you need a deed of trust with unequal shares. You each add your cash deposit to half the initial mortgage loan, divide by the purchase price and multiply by 100.

So if you bought a house for £200,000 with a mortgage of £160,000. And you contributed 80% of the deposit ie 32k, and partner 8k, you would own 56% of the property and your partner would own 44% and that would be reflected in the deed of trust.

I might be wrong but AFAIK this can only be done with a tenancy in common, not joint tenants.

To see how it works, imagine you sold off the property for 200k the day after you bought it.

As per the ownership split, you would receive 112k, your partner would receive 88k. Each of you would then pay-off your share of the mortgage debt ie 80k each, leaving 32k for you and 8k for your partner.

ban237

Thankyou for your reply. I’ve worked it out based on your calculation and that does make sense, however still means I would own a larger portion of the house should we accrue any equity, great for me but not so fair on my partner. Obviously we don’t intend to split up and say we will be fair and reasonable if we did but you just never know! 

So is it impossible to have a joint tenancy ownership and then a separate document to set out how to split the money upon sale? 

If so I think I’ll go with your option! 

alex_163163

I had their had the exact same situation. I put in £22k, my BF £3k).
BF and I own our house as tenants in common with equal shares (so we each own 50% of the house), BUT the deed of trust states that if we split up and decide to sell the house (assuming positive equity!), I get the first £19k paid back to me, and then any remaining equity is split evenly.

some may argue that puts me at a disadvantage, or I’m giving him an interest free loan, yada yada yada, but I couldn’t buy the house without his salary contributing to the mortgage, and he couldn’t buy without my deposit money. We we needed each other to purchase the house.

now we didn’t state what we would do if in negative equity, and still haven’t had that convo!! 

MovingForwards

A declaration of trust is drawn up and says after paying back the mortgage and all associated sale costs,  £X pounds (whatever your 80% is) goes to you, £X pounds (whatever your OHs 20% is) goes to him/her, the remainder is split 50/50.

I don't know why your solicitor is struggling with this.

csgohan4

MovingForwards said:

A declaration of trust is drawn up and says after paying back the mortgage and all associated sale costs,  £X pounds (whatever your 80% is) goes to you, £X pounds (whatever your OHs 20% is) goes to him/her, the remainder is split 50/50.

I don't know why your solicitor is struggling with this.

I was thinking about that.  i think the solicitor is just being lazy and doesn't want to do it

MovingForwards

csgohan4 said:

MovingForwards said:

A declaration of trust is drawn up and says after paying back the mortgage and all associated sale costs,  £X pounds (whatever your 80% is) goes to you, £X pounds (whatever your OHs 20% is) goes to him/her, the remainder is split 50/50.

I don't know why your solicitor is struggling with this.

I was thinking about that.  i think the solicitor is just being lazy and doesn't want to do it

Which is pretty daft as it's a template and only the figures, names etc to fill in. Easy £250 and normally jumped at as it all helps towards meeting financial targets.