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

OP- you've been given advice by an accountant on here. I'd be more inclined to take that advice over the opinions of unqualified people.

I'd also suggest you go and see an accountant/solicitor for advice- and definitely do it before you change anything. They will have access to all the details and can give you advice based on full knowledge of all the details. Don't let him throwing a strop make you feel forced into changing things without advice.

FWIW (having just said not to take the advice of unqualified people!)- i'd say leave the DOT in place until he has repaid the mortgage, then you can fairly put the house into 50:50 split. Until then, you should do nothing- you have put in the £80k but would also be jointly liable for the remainder of any outstanding mortgage on the property.

Your DP cannot take the interest he has paid to date into account- how he chose to finance his 50% of the purchase price is not really your concern (in a financial sense). You agreed to pay 50% each, he had to finance that by borrowing, you didn't. His choice to borrow, in the full knowledge that he would have to pay more than £80k as he would have interest to pay in addition to the £80k borrowed. He can't equate £43k plus £37K interest as equivalent to paying £80k deposit.

Also, as PP pointed out your original 80k from 13 years ago would now be worth more (Bedraggled has estimated roughly £113k now)- plus whatever you'd have earned in interest. So by investing in property with him (i.e. not putting down a smaller deposit, thus allowing a smaller mortgage- and almost certainly with a lower interest rate due to the lower LTV ratio) you have sacrificed that extra cash AND allowed him to benefit from a lower interest rate.

If you do decide to take on his 1/2 of the mortgage, I'd have a legally drawn up DOT or similar to grant you a greater share (as you will have put down 80k, plus 50% of the outstanding 37k debt).

"His argument is up to now with interest back to the building society he as paid £79400
So he only as to pay another £600 to equal my 80k I put as deposit
And we then pay the rest of the mortgage 50/50 until payed off"

This argument is complete and utter bullshit.

You absolutely definitely need legal advice.

You also need to leave the bastard.

Jacks - nice to see you know through the power of looking into a screen who is qualified and who is not.

What do accountants have to do with mortgages anyway?

His argument is wrong. He either knows it is wrong and wants to fool and bully you or he does not know it is wrong and needs to hear it from a lawyer. Actually i think another woman has worked out this piece of trickery with him and he means to keep on repeating it along with bouts of the silent treatment until you cave. Is he right in thinking you might cave, op? If so you need to grow a backbone and think about your senior years and your son's inheritance. I notice he did not fully express what he thought on the topic of your proposed will but he clearly did not like it. This man has built up equity in this property on your coattails op. He could not get a mortgage without you cosigning and he had no deposit and i bet his improved earning power was aided by you. You have carried this man on your back long enuf,op. Take back the power you have given away to him , make decisions with legal advise on behalf of you and your son.You are going to feel so much stronger and respect yourself more if you take back control of your life.

Outtoget, I did say in an earlier post that I was a qualified accountant. Not that it has anything to do with mortgages, just my understanding of how they are calculated, and things like the time value of money, net present value etc. Which seems to be needed since the dp seems to think that his 79k paid in dribs and drabs over the period largely to service the interest on his debt is somehow equal to Ops £80k lump sum 13 years ago, which is clearly worth a lot more than an £80k lump now (I calculated roughly 1.48 times based on movements in RPI over 13 years), and both of which are worth more than £43k paid in dribs and drabs as the interest is irrelevant!

Someone needs to educate ops dp, and I am just trying to provide her with the explanation of why he is wrong.

That being said, he does have cause to feel hard done by due to the unequal DOT, which is why in the interest of fairness she should go to 5050 but not until after he repays the mortgage in full, as until then she is carrying the risk of having to repay his half too, so the DOT needs to stay in place to cover that possibility

I'd be thinking of selling the house if a man I wasn't married to, who had gained massively from my capital, started expecting me to pay his mortgage interest.

Op, you should look up definitions of the following:

Time value of money
Net present value
Discounted cash flows
Cost of capital

I used RPI in my comparison, mostly because it is readily available and you can look it up online and show your dp. Equally you could apply a %interest rate and calculate the compound interest you would have received. 3% pa compound interest over 13 years gives roughly the same valuation of £80k growing to 117k today. That isn't a high interest estimate- rates have been low for a few years but the bank of england base rate was frequently over 5% until 2009, and savings rates will have been higher, so 3% is actually quite a moderate calculation of your average lost interest over the period.

Regardless of what you bought to the table he'd have had to pay a mortgage or rent somewhere. So I'm not entirely sure why he thinks you should fund that for the last half of his term in the mortgage.

Have you kept an eye when he's remortgaged that he's not swiped some of your equity?

Problem is you have a joint mortgage with him, I think that means that you and he are jointly and severally liable for the mortgage debt.

I'm not sure where that leaves you wrt what proportion of the property is legally yours? ?

So your agreement was:

House worth £160k
You paid £80k cash
He took an £80k mortgage
Your £80k deposit is protected

That means that even if he continues to pay the mortgage to the end, if when the mortgage is fully paid off, the house is worth £200k and sold - you will get back £140k (your original deposit plus half the remaining value) and he will get back £60k.

That IS unfair, and if that's how you intend things to pan out then yes, you are ripping him off. And he'd probably have a fair legal case if he could prove that you've not contributed to the mortgage payments.

The only way your £80k deposit should have been protected would be if you were paying half each of the remaining mortgage.

Legally you are liable for the mortgage as you are on it. So if he stops paying then the lender can come after you.

I have no entire why anyone would do what you two did without a deed of trust or agreement between you. It was very foolish on both sides. Does the title at the Land Registry show 50/50 ownership? Was 50/50 your agreement and was your unwritten agreement that for the rest of the mortgage term he would pay 100% of the interest? If so and he now stops paying half the mortgage interest then he may be in breach of this verbal contract.

Secondly is it an interest only mortgage or are some of his payments each month going to repay the capital sum of £80k that was borrowed?

The fairest way I can see is that either:

He continues to pay the mortgage to the end, but you make an agreement now that when the house is mortgage free your £80k deposit is no longer protected. The house value would be split equally.

OR

Your £80k deposit continues to be protected ad infinitum, but you back pay him half the mortgage costs now (so £40kish), and pay half the mortgage in future.

You can't continue to have a protected deposit on your £80k, but expect the £80k capital that he has paid by a mortgage to be split between you!

Surely most people in this situation would have shared the mortgage payments throughout? Fair enough that your initial 80k is protected and remains yours, but the rest of the input should have been split to remain 'fair'.

Unless when you sell he also has a portion that is entirely his - 80k once he's paid the mortgage off, then any profit above £160k is split evenly.

who's zooming who?

Your legal agreements, being the DOT and the joint mortgage, do not reflect your financial reality and you are the beneficiary. Left as things stand at the end of the mortgage you own 75% of the house but your DP owns 25% having both contributed equally in capital terms. In addition your will as you outline it favours your son over your DP. I can understand why your DP is unhappy and reluctant to use the security of his redundancy capital to pay down the mortgage.

The most straightforward way to fix things is to move to a 50:50 split and use his capital to pay off the mortgage. However if I were your DP I would still not be happy with the situation with regard to your proposals for your son's inheritance.

You put in 50% of the purchase price each. You with cash and him with £80,000 of debt which you had to agree to support.
The interest on that debt is a complete red herring.
He hasn't paid back £80,000 of equity in the property, he's only been servicing his borrowings.

Should the house be sold the fair distribution is to pay back your deposit, settle the mortgage, which will be retained from the proceeds of sale anyway, and split the remains 50|50 because you were partners.

Is there a real likelihood of him stopping the mortgage payments?

In situations with step parents (i'm assuming the ops son is not her dh's?) I can completely understand why the op would leave everything - her half that is - to her child in her will. Providing of course that her oh can live in the house until his death.

If dh and I split and I got a new partner I would definitely be ensuring that my house (or my half of a house) went to my dc's, not my new oh.

What if you died, left your half to the oh. Then he meets someone and gets married and dies - your whole share of the house would go to the new wife, cutting the dc out.

Left as things stand at the end of the mortgage you own 75% of the house but your DP owns 25%

thats what I was thinking, but Im not sure if the partner understands the situation, his explanation of his grievances suggests that he doesn't.
?
Bottom line (surely) isn't what is 'fair'? rather it is who legally owns what

Seems like the partner has failed to protect his own interests? ?

Outogetyou seems to have a similar situation and it sounds fair. You had to be on the mortgage as you owned part of the house, but you had bought your 50% share outright.

Once mortgage is cleared (by him) would you be willing to make ownership 50:50?

I would be suspicious of why he is bringing all this up though. He hasnt had other personality changes (was it a brain injury?)

Bedraggledmum - I was really commenting on the poster who said that because an accountant posted everyone else's posts were redundant. I think that's pretty rude. That poster doesn't know what qualifications anyone here has - if people say they do have a qualification they may be lying, if people don't say anything about qualifications how does anyone else know what people may be qualified in?

Your posts have been great. Crunching the numbers us vital and I agree the OP's dp needs some support in understanding how those numbers would stack up.

How a DOT, the Land Resitry ref how ownership is held, how mortgage companies and mortgage law work are all also vital. Not to mention the emotional support.

Personally I think the OP needs to see a lawyer and she and her dp both take separate legal advice to achieve both their aims (which may not be 'fair', fairness being somewhat irrelevant. Someone up thread said she shouldn't leave her half of the house to him cos of her child, if dp remarries then dies house will go to new wife, bypassing child. Well my dp has done exactly that and he knows full well that could happen. Some of you may not see it as fair but he wanted it that way. His view is that dss shouldn't expect anything from him and he wanted me to be looked after. I, along with him, am providing a home for his child now, not providing an inheritance. If I die if goes to him. If we both die it goes to dss, not to any of my family, but that would be via dss DM while he is under 18, and you know what - I am cool with that!).

I'm a lawyer so obviously on a legal issue I trump everyone... there two issues

1. The current legal position - hence my legal questions above - they seem to have some kind of verbal agreement and stupidly chose not to have a written one at the time - recipe for disaster as ever.

1. What would be fair now and form now on - an accountancy and moral issue.

I had not spotted she had a child. If I moved a man in here he would not get a penny of my assets. I've already paid a fortune out to a man on divorce and everything I now have is for the children. You can get a co-habitation agreement drawn up when you move in with someone. It's very normal these days.

"However if I were your DP I would still not be happy with the situation with regard to your proposals for your son's inheritance."

So the OP should prioritise her nasty, grabby partner over her own son?! What nonsense.

Outtogetyou, I agree. It is also important that if he does repay the mortgage and she wants to go to 5050 that they are tenants in common at 50:50 and not joint tenants, whereby he would inherit the whole house if she died and she couldn't leave it to her son.

Grazia, the repayment arrangements are a verbal agreement between them, and on the face of it they both share the mortgage. However, they do have a formal DOT protecting her original deposit.

The waters are somewhat muddied by the dp's questionable intentions though. Yes, the DOT is unfairly skewed in OPs favour, but she has taken all the risk so far and could still be liable for the mortgage balance too, so if the dp might not have the best intentions then she should protect her own interests.

If the house is sold now at 250k with the mortgage outstanding paid from the proceeds and the DOT in place op gets 147k and dp gets 67k. Given he has 70k lump sums in the bank he is also quite flush with 137k.

If dp uses lump sum to pay off the mortgage and house is sold for 250k with DOT in place the dp does lose out as op gets 165k and he gets £85k but has already depleted his savings to pay off mortgage so now has £119k

If the dp pays off the mortgage using his own lump and Op redraws the DOT at 50% and they sell for £250 then op gets £125k and so does Dp, which gives him total savings of 159.

Obviously op benefits most from keeping the DOT so it depends what she thinks her dps intentions are whether she wants to give that up.