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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:
jackstini · 14/03/2024 09:05

You don't need a deed of trust

You need to be tenants in common with 50% each

You put in £200k cash
He puts in £70k cash & £130k via mortgage in his sole name

You do not go on the mortgage, only he is liable

What will you do re bills, have you discussed?
He is higher earner but then you have 2 kids living with you...

autumnlace · 14/03/2024 09:13

Hello OP.

Please carefully consider whether you are really happy to give up a mortgage free house when you have 2 young children.

I have previously had a deed of trust made for a house bought with an ex partner as tenants in common.

It was really simple and straightforward done with my conveyancing solicitor, and didn't bother any mortgage lenders.

My deed of trust more or less outlined:

Partner A's £40K deposit will be returned/protected to them
Partner B's £15K deposit will be returned/protected to them
Everything else would be split 50/50.

Obviously as you have kids, you need to speak to the solicitor ringfence your portion going to them via an updated will.

Sicario · 14/03/2024 09:31

Get this pinned down and watertight by a good solicitor who knows their onions.

Have your contribution expressed as a percentage of the purchase price. So for example your protected deposit was 35% of the value of the property.

It is essential that your protect yourself legally and financially and that he signs off on the agreement so that there's no claiming "I didn't understand what I was signing" nonsense in the event of a split.

Frankly I would never compromise owning my own property for the sake of moving in with a partner. It's a high-risk strategy that can seriously end in tears.

TempleOfBloom · 14/03/2024 09:33

jackstini · 14/03/2024 09:05

You don't need a deed of trust

You need to be tenants in common with 50% each

You put in £200k cash
He puts in £70k cash & £130k via mortgage in his sole name

You do not go on the mortgage, only he is liable

What will you do re bills, have you discussed?
He is higher earner but then you have 2 kids living with you...

But then he owns 50% but might have only paid off a small amount of the mortgage!

jackstini · 14/03/2024 10:02

TempleOfBloom · 14/03/2024 09:33

But then he owns 50% but might have only paid off a small amount of the mortgage!

Show quote history

No, he will own 17.5%
The mortgage company will own 32.5% - which he will be completely liable for, as OP won't be on the mortgage
OP will own 50% outright

WinteryConditions · 14/03/2024 10:08

2 years is a short relationship. I'd wait.

TempleOfBloom · 14/03/2024 10:14

jackstini · 14/03/2024 10:02

No, he will own 17.5%
The mortgage company will own 32.5% - which he will be completely liable for, as OP won't be on the mortgage
OP will own 50% outright

Show quote history

That is why there needs to be a Deed of Trust! To specify that.

A Deed of Trust isn’t a big deal, and is normal alongside buying as TiC

endofthelinefinally · 14/03/2024 16:15

What happens with wills and inheritance wrt your children if anything happens to you? Will he look after the interests of your dc?

cestlavielife · 14/03/2024 18:46

You do not go on the mortgage, only he is liable

Yes but mortgage is secured on the house which she part owns
So if they want the money back eg default then house has to be sold

You cannot just sell half a house...
Or op suddenly needs to find the money

What about the dc to which he has zero responsibility?

Op keep your house rent it out

Buy a cheaper house with dp with his 70k deposit

Octopuslethargy · 14/03/2024 19:52

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.

They are the higher earner but they cant get a £130,000 mortgage on their own?

endofthelinefinally · 15/03/2024 07:46

You sound very naive. Is he much older than you?

Collaborate · 15/03/2024 09:21

I've seen some advice on this thread that fundamentally fails to grasp how joint property is owned.

OP - you need a deed of trust and passibly also a cohabitation contract.

The deed of trust should state that as between the two of you, you own 50% of the property free of mortgage. He owns the other 50% subject to the mortgage debt.

The cohabitation contract is necessary because you have agreed that he will be solely responsible for the mortgage payments, and that you will both share equally the other household running costs.

You cannot avoid being a party to the mortgage, because the lender would refuse to lend unless both legal owners are a party to the mortgage deed. What you can do, in the deed of trust and cohabitation contract, is make sure that between you both, the mortgage is treated as his debt.

Usedtobecoolnowiloveairfryers · 15/03/2024 09:31

Yes - it’s a deed of trust! When DP and I eventually buy together he will have equity to put down whereas I won’t - long story short I lost pretty much everything years ago but will have a decent deposit to put towards it. So yes we will be getting (and have mentioned) him getting a deed of trust, equally I will be protecting my deposit too (will probably be around £30k). It safeguards him and his children and anything thereafter these figures is joint.

Good luck OP!

Singleandproud · 15/03/2024 09:36

The good intention of him paying the mortgage is all well and good but what happens if he loses his job, becomes ill, has an accident and can't work or dies?
I really wouldn't be giving up your freedom of mortgage freeness to take on someone else's debt.

TempleOfBloom · 15/03/2024 10:50

@Collaborate “The deed of trust should state that as between the two of you, you own 50% of the property free of mortgage. He owns the other 50% subject to the mortgage debt.”

Firstly thank you for explaining the mortgage pov. But surely if the OP is contributing £200k and he £70k deposit, she should own more than 50% of the share of property which is free of mortgage?

prh47bridge · 15/03/2024 14:32

TempleOfBloom · 15/03/2024 10:50

@Collaborate “The deed of trust should state that as between the two of you, you own 50% of the property free of mortgage. He owns the other 50% subject to the mortgage debt.”

Firstly thank you for explaining the mortgage pov. But surely if the OP is contributing £200k and he £70k deposit, she should own more than 50% of the share of property which is free of mortgage?

No, @Collaborate is correct. If the property were to be sold immediately, she would get £200k but he would have to pay off the mortgage from his 50%, so he would only get £70k. If she owned more than 50% of the property, he would not get his £70k back.

TempleOfBloom · 15/03/2024 15:38

prh47bridge · 15/03/2024 14:32

No, @Collaborate is correct. If the property were to be sold immediately, she would get £200k but he would have to pay off the mortgage from his 50%, so he would only get £70k. If she owned more than 50% of the property, he would not get his £70k back.

Show quote history

Oh, I see - thank you - that makes sense, that it would be based on the income from the sale price...and he would have the liability for the mortgage loan.

Geebray · 15/03/2024 15:39

Get yourself to a solicitor, OP.

Original poster
Wednesday12 · 16/03/2024 07:38

Thanks again for your replies.

We have spoken with a mortgade advisor and its not possible to buy 50% of the house cash and not be on the mortgage. The bank would not easily be able to repossess in the case of default.

You can of course draw up agreements (TIC) as others have said. To protect your investment. But you can not stay off the mortgage.

We are looking at both putting in 70K and me investing my capital in a rental. Or renting my house, and partner owning more of the 400k house as it would be their 70k deposit, but of course we would have a bigger mortgage.

We will see what our options turn out to be and I will post the outcome, in case its of use to others.

Thanks again for you help with this. It is much appreciated.

OP posts:
Duckinglunacy · 16/03/2024 07:45

We bought our first house as tenants in common - the deed stated that each would get back the deposit they put in, and share equally any increase in equity. It also had buyout clauses.

it was my first house, his second, and I actually found it really comforting that all of the things that needed to happen in the event of relationship breakdown were laid out.

a friend didn’t do this and became joint tenants when she added her later boyfriend to the mortgage. They later separated without having been married which caused a financial mess.

ssd · 16/03/2024 07:50

Following

Propertylover · 16/03/2024 11:26

@Wednesday12 a sensible way forward. Hope it all goes well.

TempleOfBloom · 16/03/2024 21:07

Good luck @Wednesday12

N.B Collaborate and prh47bridge on this thread are lawyers.

VeniVidiWeeWee · 17/03/2024 00:23

TempleOfBloom · 16/03/2024 21:07

Good luck @Wednesday12

N.B Collaborate and prh47bridge on this thread are lawyers.

With apologies to both Collaborate and prh47Bridge, who both seem to offer excellent legal answers, how do you know this?

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