Q My boyfriend is buying a house and I plan to make a cash contribution in the direction of its purchase. The mortgage could be solely in his call as I already personal some other assets (which I plan to keep and hire). The fee of the property is £487,000 so I plan to make contributions £48, seven hundred plus £1,435 stamp obligation in order to own a ten% proportion of the assets. I will then be paying 1/2 of the mortgage with my associate each month. I queried whether this became truthful as if we have been to break up I would best walk away with 10%. He will contribute £50,000, plus the remainder of the stamp duty and prices. He has children and has been through a divorce and so is attempting to defend himself as he has referred to that I already own a home. It bothers me that this association isn’t the fairest manner to work this out. Any advice might be a lot liked.
An I’m with you on the association no longer being the fairest, because it isn’t. Paying 10% toward the acquisition price and then paying 1/2 the loan each month have to make you entitled to share of extra than 10% (due to the fact a part of the month-to-month loan repayment goes toward paying off the mortgage, consequently growing your fairness). However, I also can recognize that going thru divorce lawsuits can also have made your boyfriend a piece as soon as-bitten-two times-shy approximately collectively-owned belongings, but if this is the case, perhaps he ought to keep away from joint possession altogether. And possibly you should too in case you doubt the equity of all of it – no longer least due to the fact, any such loss of belief can’t be excellent in your dating. This can also make sense from a financial factor of view. Because you already own a belongings which you’ll no longer be promoting, the stamp responsibility land tax (SDLT) due on the whole purchase charge of the brand new property would be on the higher charge (ie fashionable rate plus 3%) so your 10% share of the total SDLT invoice might be £2,896 instead of £1,435. The better rate of SDLT will even observe in case your boyfriend’s erstwhile family home has now not been offered and he still has a hobby in it. However, if any settlement about the circle of relatives home with his ex-spouse has been recorded in a consent order accepted by means of the court docket, he might be exempt from paying the better rate of SDLT.
What sincerely issues me is that in case you are not going to be named at the mortgage, nor will you be named as a joint proprietor of the property at the Land Registry. It is a rare – if not non-existent – a lender that is ready to difficulty a loan in a sole call whilst there’s more than one character named at the Land Registry. That’s because if there’s one mortgage holder however two professional proprietors if the mortgage payer defaults, a lender can’t take possession of the belongings at the same time as the other proprietor remains to dwell there and lenders don’t like the concept of any longer being able to get their money returned. Before turning in any coins, you need to establish exactly what your coins contribution is buying. In addition, I advocate you get felony advice on what kind of written agreement you need to have drawn up to mention how you may get your cash back if you and your boyfriend split up and/or the property is sold.