Buying a house with partner

moliver_93

Hi there, just wanted to get opinions as I navigate buying a home with my partner. Here are the facts:

- He brought his house back in Oct 2017, I moved in in Nov 2017 and have been paying half mortgage/bills ever since - we didnt put anything formal in place such as a contract
- He has just sold said house, we are looking to buy one together for approx 500k - he will have a deposit of approx 350k (through inheritance and equity made on current property)
- I have 10k saved
- We will need to get a mortgage of approx 150k - I have proposed that I pay the full mortgage as a way to buy into the property quickly (this is affordable for me on my salary)

We are going to speak to a solicitor regarding this but I just wanted to get a sense of what is reasonable here. i.e., should I pay for half of the fees? (solicitor fees of the sale of this current property, estate agent fees, plus purchase, stamp duty etc of our new home) all of these costs will amount to approx 16k and of course I will be losing my first time buyer benefits, but I wouldn't be in this privileged position without him. 

Its a complex situation, and I just want to make sure its as fair and stress/conflict free as possible, so we can go into our new home both happy with how much each of us have put in/paid and own in terms of the new property. Whatever happens, we will get this written up legally by a solicitor.

Would be great to hear from anyone who's had a similar situation.

Thanks!

Deedoodee

Before you started paying half the mortgage had you decided what would happen in the event of a split? 

Friends of mine just moved out of one owned house to buy together. They are treating the sale (costs and solicitor fees) as part of her own assets and then writing up a new deed of trust for the new house. They split stamp duty equally. But she was the only one paying the mortgage

moliver_93

Deedoodee said:

Before you started paying half the mortgage had you decided what would happen in the event of a split? 

Friends of mine just moved out of one owned house to buy together. They are treating the sale (costs and solicitor fees) as part of her own assets and then writing up a new deed of trust for the new house. They split stamp duty equally. But she was the only one paying the mortgage

We didn't decide anything, it happened quite quickly. Thats interesting, thank you for the insight! 

Deedoodee

I’d definitely chat about it to make sure you’re on the same page. Might be less of a risk for you if he’s putting in more money. I have a friend who was cohabiting. Put up most of the money. House deed said the split was 50:50. No deed of trust drawn up. When they split he lost a lot of his money

mdj1876

When you purchase the house together, you decide how you will jointly own the house -  tennants in common or joint tennants.

One is where you own the house equally. If one dies, the other automatically inherits the whole house. If you sell, everything is split equally.

The other is where you each own your own % and your share gets written into a will (if you die, who it goes to) and when you sell, you get whatever % is in your agreement. I suggest if he is contributing significantly more and he doesn't want to 'share' this, then you go with the latter option to have separate shares in the house. 

As for the fees, depends what benefit you are getting out of this. As a minimum, I would agree to go 50/50 on all of the purchase costs (solicitors and stamp duty).

However, really, you should just have an adult conversation about all this? I'm surprised you haven't already. Absolutely do not offer to take on the full mortgage...this is a silly idea! 

As a side note, legally you are entitled to 'something' even if you split now, as technically you have been contributing to his mortgage for over 2 years. 

tacpot12

I would say that he should pay all the solicitors fees for the sale of his house, and that all the costs of purchasing the new house (except Stamp Duty Land Tax) should be split 50/50. I would say that the SDLT should be paid in proportion to the equity that you will own in the new house. This is because he is paying more of the purchase price, and will draw more out if the house is ever sold. 

You will need a Deed of Trust to define how the proceeds of the house are split, but I don't see a problem with you paying all the mortgage. The mortgage company might insist that he joins you on the mortgage, i.e. he is legally bound to repay the mortgage if you default, but this seems unlikely. (The Deed of Trust should be written in such a way that any mortgage payments he makes results in him getting that equity that a payment from you would receive). 

I think the Deed of Trust should include the fact that your bank statements are an acceptable means of providing the payments you have made to the mortgage company.

It could also include the fact that the costs of sale are to also be split 50/50 despite the equity being split differently. 

Schwarzwald

If you have paid half of the mortgage for the last 5.5 years, there is an argument to be made that you should have some participation in the equity upon sale of the previous property.