Mortgage couple - partners different contribution

learningmore11

Hi,

Me and my partner are in the process of buying our 1st house together.
We have an arrangement but we are not sure how we can work that out now, and in the future:

My partner will pay the deposit (she has money from a previous property she sold) and I will pay the mortgage (have a higher salary).
As an example let's say the property will cost £500000 
She will pay the deposit - 350000
I will pay the mortgage  - 150000

In theory she will own 70% of the property and I will own 30%. - Is that correct?
If, in the future we sell the house what is the best way to reflect that on a contract of some sorts?

If we decide to invest in the house, and assume we will pay the works 50/50 how can we reflect that if down the line we decide to sell or we split up?

Both of us have kids from previous relationships - what happens if my partner dies? will their kids be able to kick me out (considering they will own 70% of the house).

Thanks in advance.
I am based in England if that helps.

MWT

learningmore11 said:

She will pay the deposit - 350000
I will pay the mortgage  - 150000

In theory she will own 70% of the property and I will own 30%. - Is that correct?

No, at the point of purchase, she will own 70% and the lender will effectively own 30% and you have 0%.

Over time you will purchase back that 30% from the lender.

So if the property is sold at a higher value than the purchase price she would get 70% of the proceeds, the bank would get the remaining amount outstanding on the mortgage and you get the residual amount.

The way to do this is to hold the property as tenants in common with the 70/30 split documented to ensure that her percentage is protected from any outstanding mortgage balance which would come from your 30%.

Note that in the event of negative equity this also means that she would bear a higher proportion of the loss on the same 70/30 basis.

You should both make wills to determine what happens to your respective shares with protection for continued occupation by the surviving partner (a lifetime interest) if that is what you wish to happen.

There is no simple answer to handling further investment in the house as you will both equally enjoy the benefit while you live there so 50/50 makes sense, but she will benefit (70/30) from the increased value (if any) when the property is sold...

gwynlas

Another way to look at it is to protect her deposit in a deed of trust and for you to own the house 50/50 as presumably you will share costs going forward. In the event of the house being sold her  deposit would be returned and each takes equal share of equity. Wills would safeguard future arrangements and benefits for heirs. Marriage would provide tax benefits.

MWT

gwynlas said:

Another way to look at it is to protect her deposit in a deed of trust and for you to own the house 50/50 as presumably you will share costs going forward...

She may be happy with that, but if I was putting down 70% of the purchase price I don't think I'd be happy to be asked to accept a 50/50 split on any growth in value...