Please explain this to me like I'm stupid - what happens if you share a mortgage and then split up?

[Cottoncandyisland]

I'm obviously dimmer than I thought because I have read around online and still don't understand.

What happens if you and your boyfriend buy a home, say 10% deposit. Both then contribute equally to the mortgage. Then you split up say 2 years later...what happens then?

If you sell the house, what money goes where? Because you have barely put a dent in the loan in 2 years...

Basically, will we be left individually bankrupt and paying off a mortgage for the next 30 years? Will I ever be able to get another mortgage?

I plan on getting a mortgage with my boyfriend, but I am really scared about what will happen if god forbid we split up. I am a pessimist at heart unfortunately.

Remember to factor in listing and selling fees with the estate agent and your lawyer.

And also if you are in a ‘mortgage product’ with the bank to get a reduced rate deal for say two years or five years, there will be fees associated with that if you try and sell up mid way through that period. Their terms will be on the mortgage paperwork.

I had this experience when I bought my first flat with an ex, when I was 23. We split up just before the financial downturn and we negotiated via solicitors that I would keep the flat by buying him out with £20k - this was obtained by me getting a second mortgage against the property. Then the crash and it was a killer as he got a great deal. But I was well shot of him so good for me!

Are there reasons you think you may split up or are you just worrying?

The word mortgage makes it seem like something special. It's just a big loan. Fingers crossed if you are forced to sell the house, it's worth enough to pay off the loan.

When you buy a house you pay a solicitor to do the conveyancing. The solicitor will ask you if you want to by a joint tenants or tenant in common. If you buy as joint tenants you both own 100% of the house. Most unmarried couple buy as tenants in common as you can specify who owns what percentage of the house. So you could specify that you both own 50%. You could also ask the solicitor to draw up a document to specify what happens if you split up e.g. can one person force the sale of the house, etc.

Say for example you buy a 200k house and put down 20k (10k each) so you have a £180k mortgage. If you split in 2 years time you will have paid of a tiny bit of the mortgage. For example say you have got £175k mortgage. If you sold the property for 200k there would be 22.5k to split 50/50. Again your solicitor would do the conveyancing. They would request a redemption statement from your mortgage provider first and pay them first from the proceed of the sale and then split the rest according to the agreement.

I think you are worrying maybe about what happens if you are in negative equity and cant sell for as much as you have borrowed? Look up joint tenant vs tenants in common in terms of mortgages as they differ slightly in terms of what you are liable for repaying as individuals.

Buy your own place.

Boyfriends/partners/husbands come and go. A roof over your own head is for ever.

I'm 66. Brought up a child on my own. (He's doing great).
Never again will I "share" any money with some random coming into my life.

Call me cynical. i don't care. I've been round the block more times than I know. I learnt my lesson..
I will always have that roof!

@Fireflygal That's actually relevant thanks, as I am putting a bit less than him towards it.

@Merename Oh no! But thank god you managed to get away from him, I hope it worked out ok in the end. Well, I am worrying because our relationship hasn't been the same due to the strains of the last year. Both a bit miserable and depressed. I am worried we won't return to what we were. But we did plan to buy a house. I guess there is no rush, but then we have been together 4 years and if we don't take the next step, then it feels like we're in limbo

I have an uncomfortable gut feeling which has prompted me to ask this question.

@SlayDuggee Ok, that's interesting thank you. As I am putting in less towards the deposit tenants in common seems to be the more appropriate way to go

@Iflyaway

I love your attitude :) Thank you for the inspiration. You sound really strong. And not too cynical!

Very sensible, always trust your gut instinct

If you take out a joint mortgage with no other caveats then it doesn’t matter who paid what, it will be split down the middle. If he wants to protect his extra deposit money he’ll need to get the solicitor to write that in. I have a friend who is getting divorced. She has never paid a penny of her current mortgage as she has always been a SAHM. But she’s still entitled to half the proceeds even though their son has left home because the house is in joint ownership.

@Cottoncandyisland

Thank you for your kind words..

I tell you, I have been down on my knees...

The only way is up!!

Wishing you all the best in whatever you decide to do.

Assuming you don’t end up with negative equity of course Where the house is worth less than the mortgage Then you are in trouble

Just protect whatever you put in even if it’s £5k or 10k do it as a deed of trust outlining what you have put in as a deposit
That way if you put in more you will at least get back what you put in ( providing no negative equity)
Otherwise if you put in 20k and your partner 5k
When you split despite you putting in 15k more he will be entitled to half of your 20k deposit
And you will be entitled to half of his 5k
So for your 20k you end up with 12.5 - your half of your deposit and half of his deposit

And for his 5k investment he ends up with 12.5
Your half of your deposit and his own half of the deposit so a much better investment for him

Plus you both share any equity that may be left over

Although if you’re putting in less and he’s putting in more don’t protect it go joint tennants and if you do split up you will walk away with 50 percent of his deposit and 50 percent of yours if prices rise 😂😂

Look up joint tenant vs tenants in common in terms of mortgages as they differ slightly in terms of what you are liable for repaying as individuals.

Nonsense. It affects ownership, not joint and several liability for a mortgage.

And watch out if you do split up - the previous poster referred to joint and several liability. So, if you were to split and he moved out and stopped paying his share of the mortgage the lender would look to you to pay the whole amount, not just your share.

Given the shaky state of the economy I personally wouldn’t but a house with a boyfriend I was seriously worried I’d split up from, because if you end up in negative equity, it will be a pain in the arse.