Buying a house with my sibling - how to share my 50% of the house with my partner? Advice needed!

123Harry

Hello everyone, 

 I'm a first time buyer with my sibling and we are very fortunate to get on the property ladder. We have been gifted money through our family and we have both our names on the mortgage. We are hopefully moving in at the end of March this year and it's going to be a modern family arrangement with my partner of 7 years moving in with us as well. My partner and I have been living together for 5 years prior and we both have a great relationship with my sibling.

I'm only able to get on the property ladder purely through my family and my partner is not in the same financial situation. We've been together a long time and I want him to feel part of this house and give him a nest egg as well. My sibling and I have decided to split the mortgage between ourselves £650 each to keep it clean. I will share my 50% of the mortgage contributions with my partner which equates to £325 each. My thought process is to share the mortgage contributions, any contributions made will effectively be owed to him once we sell. All this money would then go into a pot for our future together but it would be made up of our individual contributions. I.e my deposit and my mortgage contributions and then theirs. I'm still in talks with my sibling regarding if we all put in money for renovations for the house how would it look like when we sell.

Basically i'm looking for advice/suggestions to make this arrangement formal at a low cost so everything is super transparent so if anything was to go wrong between us we both know where we stand. I've saved and spent a lot on solicitors so far so really I'm looking for a low cost alternative if possible. I'm struggling to find any example similar to mine online to draw from. Does anyone know of situations similar to ours and what the solutions were?  I've searched the following Declaration of Trust, Deeds of Trust, Co-habitation Agreement which all have costs up to the thousands. 

I just feel to get on the property ladder these days is impossible without help. I'm just in such a fortunate position and I want to share that with my partner in a fair way.
Any help and suggestions would be great.

Thanks, 

Harry





 

sammyjammy

If I were your sibling  I would be very wary of the whole situation,  I get on very well with my brother and sister but I wouldn't want to live with either of them no matter as part of a couple.  How big is the house?  Leave your partner out of renovations etc. its way too complicated and a recipe for disaster.  

HampshireH

123Harry said:

Hello everyone, 

 I'm a first time buyer with my sibling and we are very fortunate to get on the property ladder. We have been gifted money through our family and we have both our names on the mortgage. We are hopefully moving in at the end of March this year and it's going to be a modern family arrangement with my partner of 7 years moving in with us as well. My partner and I have been living together for 5 years prior and we both have a great relationship with my sibling.

I'm only able to get on the property ladder purely through my family and my partner is not in the same financial situation. We've been together a long time and I want him to feel part of this house and give him a nest egg as well. My sibling and I have decided to split the mortgage between ourselves £650 each to keep it clean. I will share my 50% of the mortgage contributions with my partner which equates to £325 each. My thought process is to share the mortgage contributions, any contributions made will effectively be owed to him once we sell. All this money would then go into a pot for our future together but it would be made up of our individual contributions. I.e my deposit and my mortgage contributions and then theirs. I'm still in talks with my sibling regarding if we all put in money for renovations for the house how would it look like when we sell.

Basically i'm looking for advice/suggestions to make this arrangement formal at a low cost so everything is super transparent so if anything was to go wrong between us we both know where we stand. I've saved and spent a lot on solicitors so far so really I'm looking for a low cost alternative if possible. I'm struggling to find any example similar to mine online to draw from. Does anyone know of situations similar to ours and what the solutions were?  I've searched the following Declaration of Trust, Deeds of Trust, Co-habitation Agreement which all have costs up to the thousands. 

I just feel to get on the property ladder these days is impossible without help. I'm just in such a fortunate position and I want to share that with my partner in a fair way.
Any help and suggestions would be great.

Thanks, 

Harry





 

The problem is this isn't your partner's nest egg.

If you split you (not our sibling) will need to pay him back. 

If your parents wanted to gift it to you and your partner, surely you would be buying between the three of you (just to complicate things further)

You will be paying half of mortgage and bills etc despite being two of you taking up space etc. Is your sibling happy to pay a full half when you are paying a quarter as is your partner?

Could you afford a lump sum payment if you split.

What happens if your sibling wants to sell but your partner still isn't financially able to commit to your next purchase 

Your partner will only get back what hey put in so no benefit (and you may lose out if it goes down in value as you will owe him the same value regardless)

Isn't his money better off in a bank or somewhere else ready to put into your next purchase as and when it happens? In the meantime he contributes to bills and food etc?

Just a few things to think about.

It sounds like a recipe for disaster (sorry that's not what you want to hear)

Edited to add: your partner will need to sign to say they have no interest in the property as an over 18 living there for your mortgage.

Annisele

123Harry said:

 My thought process is to share the mortgage contributions, any contributions made will effectively be owed to him once we sell.

That sounds like it could become incredibly messy.

Your partner will be making contributions to the mortgage, so might (stress "might", not "will") be able to make a claim on the equity. If you do this without solicitors, and in particular without your partner getting legal advice, your chances of being able to rely on an agreement that puts one of you at a disadvantage go down.

Another interpretation is that your partner would be living for free, and that doesn't sound very fair either.

AnotherJoe

So there are three people living in a house, and one of them pays half?

Err, no.

getmore4less

I will try to come at this  as 3 way purchase the dynamics of the relationship may make this option less workable.

You have a property that has cost depost mortgage and costs to buy
You will be 1  sister 2  partner 3

there cash inputs(deposits D) that cover the deposit and all costs to buy) 
£D1
£D2
£D3

mortgage £M to be split 50:50 you plan to split your  50:50 with partner so a 50:25:25 split

You say renovations(R) when are they likely to happen and how are they getting funded?

if fairly soon(say  up to 2 years and cash is available) then you could put that cash into the purchase pot   £R1, £R2, £R3 
(even if planned to be put in over time you could count it all now to keep it simple)

Now the place is costing.
£D1,2,3 + £M + £R1,2,3  = £T

you could split the ownership  and debt into 3 portions.
(£D1 + £R1 +  £M*.0.25)/£T
(£D2 + £R2 +  £M*0.5)/£T
(£D3 + £R3 +  £M*0.25)/T

The mortgage debt is split 50:25:25  and whats left in the future comes out of each share from above  when redeemed.
 Fairly straight forward to write up  in a trust deed even if just you sisters are on the property deeds and mortgage. 

if renovations are not to be funded up front then it can start to get a bit more complicated as ideally you work out the shares above without the £Rs  and then contribute in the proportions of ownership as you would for any future addition if you did some after the initial ones.


there is an issue with what you said.
 I will share my 50% of the mortgage contributions with my partner which equates to £325 each. My thought process is to share the mortgage contributions, any contributions made will effectively be owed to him once we sell. 

This does not work as the payments are servicing debt and over time they can exceed the value of the property.
probably better the either buys a share(even if just on paper) or he just saves the money.

This all assume that you are keeping the living in the places costs totally separate from the purchase costs

csgohan4

Money and family shouldn't mix IMO

What if your sibling also wants to settle down and also bring their partner to live with them?

Getting on the property ladder at any cost is false economy

Nothing is worth your relationship with your sibling. 

You may think it's fine now, but when you start arguing about utilities, repairs e.t.c

BrassicWoman

Please all three of you live together in a rental for 6 months before you do this. Small rental cost now saves pain later.

getmore4less

I did wonder if "modern family arrangement"  was some sort of code.

SpiderLegs

AnotherJoe said:

So there are three people living in a house, and one of them pays half?

Err, no.

The one that pays half, owns half.

hazyjo

SpiderLegs said:

AnotherJoe said:

So there are three people living in a house, and one of them pays half?

Err, no.

The one that pays half, owns half.

But surely the extra third person should be paying some rent/bill share to them both. Not just the person whose room they share. Why is the other sibling getting naff all?