Money Moral Dilemma: I put in a much bigger deposit - but should we split the property equally?

getmore4less

This issue comes up regularly and you get a few regulars contribute the various options
make it a MMD and a load of 1post wonders come out of the woodwork. 

the 2 common options are 

get your money back  equivalent to an interest free loan of 1/2 the difference

equity based on inputs and share of the mortgage

When equity based cost to the property like maintenance and improvements should be done at the same shares.

HRH_MUngo

My friend's daughter put in substantially more than her partner to the deposit on their house.  They share the mortgage equally.  I think they had a deed of trust drawn up, whereby if they split up, she is able to take her proportion out (and her partner his) and then share the rest 50/50.

My son just bought on his own (with bank of Parents helping out on the deposit), because at the time his partner was in debt.  The property is still solely in his name ten years later (and she is now out of debt ).  I assume if they ever split up, then he will take out his proportion and they would split the rest 50/50.

jedav

My partner and I had a Declaration of Trust drawn up by a solicitor - the Land Registry only want to know who owns it, not in what proportions.  I put in 2/3 and he 1/3 (cash and paying the mortgage).  The mortgage is in joint names (I doubt that a provider would have lent in his  sole name) so I am legally liable if he defaults, but that gives me the option of not losing my home.  If the declaration were to disappear the ownership would be assumed as 50/50 so think about storing at bank/solicitor in case something happens to one/both of you in case unscrupulous people 'lose' it.  Also each have aa certified copy.  It's worked so far for us and the mortgage is nearly paid off now, it remains to be seen what happens when we die.  We have provision in our wills for me to have a certain amount of time to buy his estate out and him to have a life interest to live there or use the proceeds of sale to downsize.

If you will share the mortgage repayments equally it seems that you should have 67.5% and your partner 32.5%, if in proportion to what you put in.  This will mean that you benefit from any uplift, or suffer any downturn in property prices in proportion to your respective investments, taking into consideration the opportunity costs ('loss' on amount invested from not investing it elsewhere).

On selling if you decide to each take the deposit sum you input before further distributing the proceeds in proportion to your payment of the mortgage then your partner would benefit more from any increase in prices but suffer more from any fall than in the above scenario.

Discuss what happens if one/both of you dies or loses their job so is unable to pay their share of the mortgage (you may want insurance for these eventualities).  Would either of you be able support the other financially if not in work?

Up to the two of you to negotiate what's 'fair' by your definition, but I wouldn't (didn't) split it 50/50 as I want my share (including family money) to go to my family and his share to go to his (he has children from a previous relationship).  Make wills to protect each other.  Hope this helps you think about the issues, and good luck!

crmism

The solution to your dilemma is straightforward; instruct your solicitor to place title into your joint names as tenants in common and in proportion to your individual contributions. That way, your interests are protected.

ginger_chocolate

SuseOrm said:

The professional misogynists have arrived i see.    

You can get paid to be a misogynist? That explains a lot...