Help with housebuying legal ownership and percentages and maths!

[justformodesty]

not rocket science if you follow the housey threads and i guess my style of writing is a bit of a giveaway ? but it seems a bit crass to write this in my own name.

I have 170 thousand as a deposit on a house. It is an inheritance. I want to be fair to dh if we should split. I don?t want to get a better deal. In this light then can you work out the fairness in this mathematical problem.
We are buying for 245,000. I have a 170,000 deposit . This deposit is ringfenced by whatever (legalese) should we get divorced.
i want the 170,000 back plus interest ? so i guess that this should be worked out as a percentage Of the 250,000 then in say 10 years if we get divorced the 170000 will be worth this in relative termd ? are you with me? but this migh tnot be right or fair or indeed the best way!

Dh has nothing to contribute initially financially however he will be paying half the remaining mortgage / upkeep of the house, maintenance etc.

Now in my head i see the mortgage/equity as a seperate sum which is divided in half. The equity/profit should be split right down the middle and this does not include my contribution in percentage or relative terms. Still with me? Well done.
What doesn?t seem fair is if we lump the initial investment together with my share of mortgage ? say that is 85% on total ? this means that i get 85% share of total equity. Whilst dh gets 15% but pays half of maintenance etc. I will get more equity becuase i have a greater total share and he will get less. The equity after the 170,000 should be split equally. Can anyone have a stab at putting this more simply ? does anyone know WTF i am talking about? or have i just gotten myself in knots.

Obviously dh and i have talked this over. he is 'irked' i am taking thisegal step but he knows why.

Ok use 250 because the maths is easier

170 is 68%

So you get 68% of the future price of the house

So if it sells for £375 you get £255

You each get (375-255)/2 = £60

So you would get 315 & he would get 60

Sorted?

So. The 170k is your contribution to the house, which is your deposit.

You need a mortgage for the remainder (245-170 = 75k)

You get to keep deposit if you divorce, plus interest. OK, I get this bit. I think you need to work out the interest rate, if you treat this as a separate equity then the remaining 75k needs to be treated differently. It seems fair that the remaining equity after paying the mortgage should be split should you divorce.
The 85%. As you have paid the deposit and half of the remaining mortgage etc then I understand why you are confused. It seems excessive but if he doesn't contribute towards the deposit he can't claim any of the money as this would be unfair. You are protecting your interest, which is more than fair.

So you roughly get 85% & he roughly gets 15%

If the house price drops to 100K you get 85 & DH gets 15

Idont know if the 85% is fair or if the 170 should be treated seperatley - and would that make any difference?

The equity on (approx)85% is more than 15%(approx)but it shouldnt be it should be half

I can't reclaim 170k in 20 years as just 170 ( should we divorce) as it wont be worth 170k relatively speaking. arrggghhhhhh i am so stupid help!

What does "The equity on (approx)85% is more than 15%(approx)but it shouldnt be it should be half" mean?

You put up 68% of the house - so you get that back the rest is split 50/50

Mind you if a man put up 68% of the house - if you divorced you would get some of his deposit (I think)

68%

where i get confused is that then there is 32% as a loan.

this is then half each 16%

so so i add the 68% and the 16% to get final equity( after bank is paid back) - would this make it more than it should be.

or am i uneccesarily confusing things?

katygeting dh to sign legal document re deposit

OK you put £170K deposit on a £245K house - that is 68% (unless you are including stamp duty & solicitors fees)

You are borrowing £75K so you are each liable for £37.5K

If you sold it the day after you would get £207.5K & he would get £37.5K but the bank would take £37.5K from each of you so you would end up with 170 & he would have nothing

Are you with me so far?

yes

but if there were equity?

I think I get what you are saying. Effectively you want your 170 to be treated as part of the mortgage. So if your mortgage is at (say) 5% per annum and the house prices rise at more you only get 5% on the 170.

So for example if you sell the house in 4 years for 350 you would get your 170 plus interest (say about 200) and then half the equity (so half of the other 150, i.e.75)

You have to decide what a reasonable interest rate is and also what happens if prices go down.

So if the house is worth £300 in 8 yrs - you will have paid (very little) say £25K off the loan?

So sell house for £300K

Take out 68% £204K

Balance = £96K

Pay back bank (75 borrowed less 25 paid off) £50K

Balance = £46K

So you each get £23K

Your total £227K his £23K

I wouldn't do what ib says you are likely to get a better rate on property increase in the long term than the mortgage rate

If you own 68% of something at the start you should own 68% of it at the end

Remember to factor in home improvements - you should each pay half of them

well ib that sounds simple enough

but is that fair

as if i have a large majority - yet DH is still paying HALF the maintenance/repairs etc

that cant be fair - unless we have some horrible system for the next 15 years whereby he only pays for one third of the central heating epairs or somehing?

but we have talked about this and dh mentioned two points.

1. it doesn;t matter if he only paid one third and i paid two - we piss in the same pot

2. he says that i will be disproportionally getting more money if we add the deposit and my share of the equity and then calculate a split of assets. as the equity on my majority share will be larger in total than his equity.

does this make sense - beucase i knew what dh meant

and he is great at maths.

i dont want to be gipped, i dont wat to be unfair and i dont want my solicitor trying to get me the better deal - so impartiality - is thine mumsnet!

am i the only person to feel a bit iffy at this?

yes yes yes katy - exactly

whats iffy PYF?

170/245 = 69%

The remaining 31% will be split 50:50

So you get 85% and your husband gets 15%

This is fair isn't it?

What's the problem again?

by the way an agreement that you don't let him have half of your stuff why you divorce is unlikely to stand up in court - Think about heather mills & the other celebrity wives they get much more than their pre-nup they signed

we are going to be tenants in common - he will have shares as will i. this is quite common for tax avoidance purposes i gather - although i dont have to avoid anything.

I think (I could be wrong) that whether you inherited the money beofre or after your marriage - he would be able to claim on it if you divorced