Mortgage dispute dp/me

[Haribogirl]

Dp and I took bought property 13 years ago for £160.000
I put deposit down of 80.000 he got mortgage for his 80.000( with both names on it, as he would of been able to get this much on his own)

So 13 years on and he's had a brain wave, he now decided that because of the interested he's had to pay for getting the mortgage that he's actually paying more than me!!
My argument is he must of known that interest was added in the first place and it's not up to me to now start paying it.

He won't it so that
He as added his mortgage payments up for the last 13 years which amount to £79400.
So when he reaches 80k(same as I put in at beginning) he then wants me to start paying half the mortgage.
Also at the beginning in solicitors, solicitor advised me to make a deed of trust to guard my 80k in the event of anything happening in the future.

He doesn't agree with this now! As he realised that in event off I would get this and half the equity we make, he thinks all off a sudden I'm ripping him off.

This is only in the event off!! Which I have mentioned.

I feel I've just protected myself as advised, he now thinks I'm ripping him off

Zampa- the op hasn't said anything about how the sales proceeds would be split- that's an assumption

Yes the op did. She mentioned a deed of trust in the original post.

That all seems hideously complicated unlucky83. When you're so intertwined with the rest of your life, why is the house different?

You have set up this purchase as 2 individuals, not as a couple.
You each put in half the capital for the house - you in cash, him via a loan.
He has paid interest. OP has lost the income that that cash would have generated either from interest or from capital growth and dividends if she had bought shares - so this arrangement has cost her money too.

Sounds like he is trying to change the terms of the deal. Which might be fine by you if you are certain you will stay together. If you are not sure about the future, you may want to protect your capital investment in the house.

But it seems very odd that he would suddenly be trying to change the arrangement after all these years.

I think that the advice she was given about the deeds was right. They aren't married. In the event of a split, she needs to be sure she has protected her equity. (Isn't it what MN keeps telling people to do in the relationship board anyway?)

Re sharing finances and paying the mortgage together.
I think it depends on how they are actually dealing with all the finances. Are all the costs (utilities, food etc...) split down as a 50/50 for everything?
Has there been some time during the 13 years when one partner needed to support of the other (eg lower income, loosing their job, matyernity leave etc...).
If the arrangement is NOT 50/50 and the OP has needed the financial support of her DP at some point, then I think sharing the cost of the interest makes sense. You are in effect supporting each other.
If you have both been fully independent financially, then the interests are fully his (ie that was his way to raise the money).
If he was the one who need financial support, then he is completely unreasonnable!!

maybe I'm being thick but if you put in £80k and your partner borrowed £80k then when the house is sold you should both get back your contribution and then divide the equity.
So, if over the term of the mortgage so far he has paid off £50k of capital and the house is sold for £200k you get £80k plus £35k and he gets £50k plus £35k.
You will have lost the interest you could have (in theory) gained and he has paid extra in interest as he didn't have the capital in the first instance.

sounds like he thought he was being really clever marrying a woman with $$ but now he is thinking he was not as smart as he thought and he wants to renegotiate the deal to one even more in his favour. He was and is opportunistic and has plans for the future that involve dividing assets. Hope you have separate accounts and are protecting yourself. I would not be planning for a future with a man like this.

They have both put in 80

He also has a loan which is irrelevant to the sale proceeds.

When they sell they each should get half. He will need to repay his loan out of his half

A deed of trust can be as simple as x gets 80k in even of house being sold.

So I am an accounts, and thought I would do an Npv calculation! So based on the RPI over the last 13 years, the £80k the op put in is worth £118k in current terms, roughly 1.5 times what she put in. He has currently only contributed a total of 80 but will probably end up having contributed £150k or so assuming a 25 year mortgage. As will she if the rate of inflation is similar over the next 12 years.

The only issue here is the protection on the £80k and whether that means they own unequal percentages and if the op expects to take more than 50%, which wouldn't be fair if he continues to pay the mortgage to completion.

Actually when peole aren't married, things arent' all shared. Not in the yeyes of the law and certainly not if they are separating...

unlucky I think you were right to get separate advice AND to jump throough hoops like this. This was, things are clear as they should be in what is in effect a business arrangement.

And yes I get that this is not quite right but if they actually separate, then this is exactely how it will looked at.
The issue here is that OP's name is on the morgtage (to help him). If she hadn't been, then it would have been obvious this was her DP's own responsibility.

Zampa, the arrangement seems to be that when the house is sold, if the proceeds had to be split with the mortgage fully paid off, OP would get her £80K back, her DP would get £80K back, and any profit would then be split between them equally. If the mortgage wasn't fully paid off, presumably that comes out of DP's share, but that is fair as otherwise OP would be paying back part of DP's loan.

How do you calculate that as OP getting 75%?

mumoftwo but that's only looking at the house.

What about the other contributions (to the house, the daily cost of living etc) that might or might not have been made? Should that not be taken into account too?

Bedraggled... She could have made a lot more if she had bough an 80k house herself so it's irrelivent what it's worth now.

He agreed to it, he can't now change it.

There was a post on this site yesterday where a woman was complaining about earning less than her (unmarried) OH, and her OH paid his share of the bills but was left was left with more disposable income at the end of the month. People thought the OH was really unfair and that he should put more into the pot so that they both have the same amount of fun money at the end of the month.

Why don't people feel this in this situation?? It seems that, where the man is the higher earner or brings more assets, he should share with the woman. When the woman is the fortunate one, she should keep it to herself.

OP, are you a couple, or are you flatmates? If you are a couple, then it doesn't seem very coupley to saddle him with the whole mortgage. I don't think you are being "unreasonable" as such to say what's yours is yours, but I do think you are acting against the spirit of being part of a couple and, if I was your OH, I wouldn't be very happy. If you ever got ill or were made redundant, how would you like him to react? If you would expect him to share with you, then share with him now.

I'm not understanding the "she's lost interest on the £80k she could have invested elsewhere" argument. Unless she's in an area where prices haven't gone up, she'll have gained plenty of interest on it by investing it in the property

But the point is that that would have happened anyway. Suppose the arrangement had been that she leave her £80K invested elsewhere and they take out a £160K mortgage to buy the house, and the value of the house then goes up by, say, £50K. If they were splitting the proceeds on sale they each get £25K (I know it wouldn't be precisely that, but let's keep it simple); but OP would also still have her £80K plus the interest earned on it. As it is, she put her £80K into the property and they get a smaller mortgage. At the end of the day she gets back her £80K plus £25K, but she hasn't got any interest on the £80K. If on top of all that she pays half the DP's mortgage interest, she's losing out in every direction.

The issue is that the partner is now trying to change the terms of the agreement. That might be fine - after 13 years together you might think that you could afford to trust him and agree to something different. Or if you have always kept your money completely separate, you might not want to make any changes.
I don't think any approach is better than another - you just need to decide what is right for you as a couple.

harsh, I think the point is that the reality in many relationships is that the female partner earns less principally because she has had to take career breaks or work part time due to having children and looking after them. There is a value to the father in terms of his children being looked after and everything else his partner does in the home, therefore if the mother is paying half of the bills it is fair that there should be a more equal division of any disposable income left after that.

Gruntled

From the OP -

As he realised that in event off I would get this and half the equity we make

So the property is sold, the mortgage paid off, OP gets her £80K and 50% of the equity. So a 75/25 split based on the house value (the percentages may differ, depending on when the house is sold)/if the mortgage is paid off).

Pacificmouse, yes that is just looking at the house. But that is all that is on the table. If they are unmarried and op hasn't mentioned kids, then legally they are just co-owners. How they run their day to day expenses and finances etc is a separate issue but one we know nothing about.

Flutter, I was just trying to provide a figure for comparison. He is looking at the fact that he has paid 79k over the years and declaring them even. But he isn't factoring the cost of capital. Rpi seemed like as good a rate as any. The mortgage interest rate would also be appropriate. The point is that when he says he has contributed 79k she needs to say "I have currently contributed 118k" in todays money.

Rpi is nice and easy to look up and demonstrate.

Or she just says, "I've paid half, you're paying half, we both get half at the end." Anything else is overly complicated and subject to differing opinions.

Moving I agree that the 80k provided by the loan 13years ago had equal worth to the OP's deposit but the DP had funding costs (the interest) in order to be able to provide the 80k in the first place.

The DP wants the OP to share his funding costs. Some of what he has paid in 13 years will have (hopefully!) been to pay down capital and some will have been interest payments. Therefore he has a share of equity in the house, but it will be less than 80k.

For example, hypothetically, if the house were sold today for 200k

What happens here? Is it 100k each? Or is it 80 to OP, plus half of the remaining 120k, giving her a total of 140. I'm not sure which way to read the original post. And this is where I get confused because I can see some scenarios that look fair and quite a few that don't.

Scenario 1:House is sold today for 200k. At present, assuming that the mortgage loan is still being paid off, the DP does not yet "own" all of the 80k he put in to the house. He's still paying that back to the bank. So there are 3 owners in a way - OP, who stumped up funds, DP who will own some but not all of the 80k equity and the bank which owns the rest of the equity. And there is surplus equity to be distributed.

I think the arrangement means the 80k deposit goes back to the OP. The amount of equity that the DP has actually paid for is probably around 40 as it's roughly half way through a 25 year loan. That means that the bank would need to be paid back the remaining 40 and this is the responsibility of DP as he took the loan out. So...80 deposit to OP, 40 loan to the bank, 40 paid for equity to DP...That takes us to 160, and leaves us a further 40 equity increase that is shared equally between the two. That does not give a straight 50/50 split but I think it's a fair outcome if that is what happens.

Scenario 2: House is sold for 200k in the future when the mortgage is paid off. OP gets her 80k, DP should get his 80k of equity and the remaining 40 equity increase should be split between them. If this does not happen, then I completely agree it would be unfair.

Scenario 3: House is sold today for 100k. In this scenario I assume that the bank will be first in line to recoup the outstanding value of the mortgage - say 40 - leaving 60 to be divided between OP and DP. Does OP get all of this, to reflect her privileged deposit? Is there a pro-rata to reflect the amount of her deposit compared to the amount of equity that the DP owns by this stage? Or does the deposit actually come to OP before the bank is paid? In this case, the house will not cover the outstanding loan and the DP will be left with 20k debt to the bank and no property. That's tough on the DP, but arguably what has happened to many people who lived through the downturns in the market that had negative equity.

Scenario 4: House is sold in the future for 100k but the mortgage has been paid off. It is most equitable for the losses to be shared equally, but I'm not sure if that's how the arrangement works.

I've probably missed tons of posts clarifying all this....

Hawthorn I think the fairest split in every scenario you describe is 50-50. They get half each and if there is any mortgage outstanding, the DP has to pay it off out of his share. Unless the OP wants to be generous and split 50-50 after the mortgage is paid off. Her name is on the mortgage after all, even if she hasn't been paying it.

I agree with everyone who says that if the OP starts contributing to the mortgage, she should get more than 50% when the house is sold, to reflect her extra contribution.

I do think the bigger picture is important though - whether both work, how much they earn, whether they have kids, and how they manage the other household expenses.

is OP paying the mortgage as well, or is it just her name on it?

Is the OP paying something else in lieu of mortgage payments (ie - is she paying bills why he pays mortgage)

If OP is NOT paying anything extra then the house should be 50:50 as they both put the same in

If the OP IS paying half living costs then its 75:25 or depending on the deed of trust might be (total equity - 80K) / 2

• its not difficult

Is the mortgage now low enough that he could get it in his own name (ie OP comes off the mortgage)?
That would simplify things legally, as then OP's interest (assuming the ownership is split and they're not tenants in common) is purely 50% of the sale value, and she'd have no liability if her OH stopped paying.

Zampa. It depends whether the equity is defined as everything except op's deposit. Or half the equity earned from house price movements which would be sensible and keep them 50:50. Op needs to come back and clarify exactly what the deed of trust says. Eg they own it 50:50 but op is guaranteed her 80 if the price falls. Or she keeps her 80 and gets half of the remainder too, which would only give you 75:25 if the house hadn't risen in value. Given they bought back when prices were rising fast that seems unlikely. If, for example the house is now worth 240k, then she might get back 80+80=160 while he only got 80 eg two thirds:one third. The higher the value of the house the smaller the difference.

At the end of the day, though, it depends what the deed says.

I think the previous arrangement is entirely fair as long as they own 50:50.
The issue isn't whether he is paying more (he isn't) it is whether she is getting more for contributing the same.