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Original poster

Deed of trust - buying house with partner

49 replies

Wednesday12 · 13/03/2024 23:14

I would really appreciate some advice about the best options for sensibly buying a house with a partner. My partner and I have been together 2 years and we are going to buy a house together.

The house is 400,000. I will be selling my mortgage free house and putting down £200,000 cash. My partner will need to port their current mortgage (I need to go on that too, but they will pay this other half) to the value of £130,000 to buy the other half of the house (they have 70,000 cash).
In the event that we split up, would I need a deed of trust, or something drawn up to protect my £200,000? I am not sure how this works, or what else I should do. I have 2 children who will be living at the house and want to make sure I have considered their interests too. Partner also is a parent to 2 older dependants who do not live with them.
Thank you

OP posts:
prh47bridge · 13/03/2024 23:15

If you own the house as tenants in common, a deed of trust can be used to set out the proportions in which you own it. So yes, that does provide a way to protect your share of the property.

Octopuslethargy · 13/03/2024 23:17

You are selling a mortgage free house to buy with someone you have known for 2 years.

Why?

Try renting together first. Or both keep your own homes and buy another together.

Bringonthesunforthewashing · 13/03/2024 23:19

I did something similar with a Deed of Trust.

Do it

ColourByNumbers88 · 13/03/2024 23:25

I got an agreement drawn up for 100k that I contributed to the property but in hindsight I wish I'd written in a clause that said in event of sale I got a proportion of the profit (aligned to my contribution) because your partner is benefiting from your large deposit. We split up after 15 years, hence my regret. But definitely got something drawn up. I'd also be a bit wary about adding your name to the mortgage because then you'll be liable for it.

Octopuslethargy · 13/03/2024 23:31

You are also buying with someone who cant get a £130,000 mortgage without you.

Do they have enough to live and pay for their share of expenses in a £400,000 house.

You may end up with a meagre hand to mouth existence as they struggle. If they cant afford to get the mortgage alone- that means the bank thinks that they cant afford to repay it alone.

Netaporter · 13/03/2024 23:34

You can have a deed of trust, but as far as I see it, you are an unmarried couple buying a house together that costs £400k. You have your half. He has his. The fact his half requires a mortgage is not your problem. Presumably he has managed to pay a similar-sized mortgage without your help? I agree I’d be wary of adding my name to a mortgage (not the same as being added to the deeds) because of the liability.

You do need to sort a will and a POA. You do not need to disclose the contents of these to your partner or the fact you are doing this. Furthermore you can protect your interest and that of your children by insisting on being tenants in common.

If your new chap doesn’t want to be TIC or be solely liable for the mortgage, I think you’ll know why he wants to buy with you. Please think carefully. I have had many friends who have been loaded with debts whilst blinded by love after fighting hard to win a divorce settlement, only to then lose it on a cocklodger.

SuperBored · 13/03/2024 23:38

Why would you be on their mortgage (and therefore liable if they don't pay) when you are contributing 50% of the costs anyway?
Don't forget that marriage will invalidate this agreement, should you consider that in the future.

Original poster
Wednesday12 · 14/03/2024 00:13

Thank you for your replies. This is very helpful.

I was under the impression that tenants in common was something that was difficult to establish currently. Given the state of the mortgage market, that lenders are reluctant to give mortgages to tenants in common.

Another factor is their morgade has a very low interest rate.

It looks like my best bet might be to draw up a deed of trust. Are these drawn up by specalist solicitors?

Thank you

OP posts:
MooseBeTimeForSnow · 14/03/2024 00:23

But surely your interest would be greater than half. You’re putting 200K in, plus signing up for another 65K.

He isn’t putting in 130K if your name is on it.

And presumably you’ll be paying towards the mortgage?

Netaporter · 14/03/2024 00:26

Yes a solicitor. And take their advice about protecting your share. You do not need to discuss this first.

TiC is not unusual. Did your partner tell you that by the way ? I’d be wary. Please give a lot of thought to who you are becoming financially enmeshed with. Do not go on the mortgage, you are financially disadvantaging yourself. Yes the mortgage rate might be low at the moment, but not forever. I’d be tempted to ask him for sight of his credit score - you show me yours, I’ll show you mine sort of thing. There are a lot of unscrupulous people out there playing the long game.. I’m not being overdramatic here when I say do all you can to check this person is who you think they are financially. I’ve had very close friends with degrees:masters etc who have fallen for this sort of thing.

TempleOfBloom · 14/03/2024 01:23

A Deed of Trust sets out the terms of ownership as Tenants in Common.

So, you will contribute £200k, he will contribute £70k and between you you will pay a mortgage of £130k? Or will he alone pay the mortgage?

Anyway, work out what % you will each contribute, and name that % in the Deed as the proportion you own.

Your solicitor can do the necessary paperwork.

Also, don’t marry.

And make a will leaving your % of the house to your Dc.

Propertylover · 14/03/2024 01:26

please get independent legal advice as I believe if you buy as joint tenants and you die the whole house belongs to the other owner and you can’t leave it to your DC.

As pp have said what you are being told is not necessarily in your best interests.

R41nb0wR0se · 14/03/2024 01:36

Please book an appointment with a solicitor. Key things to cover:

  • ensuring the house is purchased as tenants in common, with both your names on the deeds
  • drawing up a deed of trust to say that if the house is sold or you split, you're entitled to 50 per cent of the sale price/market value at the time
  • ensuring your name isn't on the mortgage
  • making a will
endofthelinefinally · 14/03/2024 01:40

Honestly, I wouldn't do it. Hang on to your own property and your financial independence. 2 years is no time at all to be throwing both those away.

Allthegoodusernamesweretaken · 14/03/2024 01:45

The deed of trust deals with your respective financial input, other things to consider to protect yourself

  1. his mortgagee may well expect you to sign a waiver of occupancy in their favour. So, say if he defaults on the mortgage, your (and thus your children’s) rights of occupancy won’t take precedence over a foreclosure
  2. would you be in a financial position to buy out his interest if he defaulted? Would you want to?
  3. will he take out income protection/life insurance to cover his mortgage ‘just in case’?
  4. you need to make a will (or update your current one)setting out what happens to your share of the house if you predecease him.
  5. he needs to make a will ditto. Would the surviving TiC be able to stay in the house ,and for how long, before the estate is resolved?
  6. how are you going to split the costs of maintaining the property?
These are just some of the basics that need to be dealt with. You really need to see a lawyer and get some holistic advice on what’s best for you and DC now.
Allthegoodusernamesweretaken · 14/03/2024 01:54

PS I wouldn’t be doing this 2 years into a relationship with the sort of financial disparity. But even if I did, I wouldn’t be splitting the value 50/50 either! Do it on the basis of the cash % you’re each putting in, because that’s what your individual investment is earning you pro rata as a return (eventual equity) on the property.

Allthegoodusernamesweretaken · 14/03/2024 02:00

Sheesh! Just realised that you’re going to be on his ’ported’ mortgage too!! So in reality you’re going from mortgage free to a mortgage of £130,000 ie taking on debt for him? 😱

endofthelinefinally · 14/03/2024 02:28

So many red flags here.

Lexlum · 14/03/2024 02:36

The Deed of Trust might protect your £200k, however, if the mortgage is in joint names and, for whatever reason, he does not pay as agreed, the lender will expect payment from you.

I strongly recommend that you obtain independent legal advice on this before proceeding.

lenahalminton · 14/03/2024 02:38

This reply has been deleted

This has been deleted by MNHQ for breaking our Talk Guidelines.

Original poster
Wednesday12 · 14/03/2024 07:11

Thanks again for your replies.

The agreement is that partner will pay the morgage. They are the higher earner, and for them it would be no difference financially to their current situation.

But of course, I would be liable for the mortgage if anything happend.

We would split bills etc, days out.I have seen their credit score. Its good nearly excellent.My children will be living in the house.

I am going to look again at the tennants in common option. Thst way it seems to tie up most things. I will post back how this goes.

I am really greatfull for the time people have taken to post and advise - its so helpful. .thanks again.

OP posts:
Netaporter · 14/03/2024 07:21

@Wednesday12 you’ve absolutely no need to go on this mortgage then.

The point about waiver is a good one. Please do not sign one…

Do you own checks about credit scores including getting him checked. My very close friend thought she was marrying a ‘high earner’ he was a complete Walter Mitty. He left her penniless and with huge debts in her name. She went from a large mortgage-free maisonette into a house ‘better for the kids he advised’ with a mortgage using her deposit. She ended up having to sell the house to pay the debts, and now rents.

I really hope he is the person you think he is, but please give your head a wobble and look carefully before you leap in.

TempleOfBloom · 14/03/2024 08:14

R41nb0wR0se · 14/03/2024 01:36

Please book an appointment with a solicitor. Key things to cover:

  • ensuring the house is purchased as tenants in common, with both your names on the deeds
  • drawing up a deed of trust to say that if the house is sold or you split, you're entitled to 50 per cent of the sale price/market value at the time
  • ensuring your name isn't on the mortgage
  • making a will

Not 50% !

He is only contributing £70k plus whatever amount of mortgage he has paid off by time of sale !!

I would suggest £200k plus the % increase in value of the house when sold.

Don’t just ring fence £200k cash because then if the house increases in value you will lose half the value of the gains on your investment to him.

cestlavielife · 14/03/2024 08:58

What savings will you be left with?
Keep 50k in a liquid justincase fund

Put 150k in house

Dont put all your eggs in this guy s basket

cestlavielife · 14/03/2024 09:01

Especially as you have children
Where is their uni fund?
Will you be in position to support x 2 thru uni?
Keeping liquid cash forr that rather than tying up in house
Why do you need to move at all?