Hi, I'm not sure if this thread is in the right place;
I had a lot of financial issues with my ex, when we split up I ended owing a lot of money and paying a lot of his debt, through no fault of my own.
My parents therefore purchased my property in their name, and took out the mortgage. I however paid a large deposit from my savings / inheritance and have paid the mortgage. There is a legal contract to say if anything happened to my parents that the property is legally mine, and the small remaining mortgage.
My DP owns his own property, he has nearly paid off his mortgage.
Me and DP are now looking to purchase his late grans property. Due to my financial circumstances and DP being newly self employed, we are unable to get a mortgage for the full property value. We have therefore obtained a mortgage which requires each of us to have a £60k deposit, for a 50% share of the property. The mortgage repayments will be made jointly.
My share of the deposit will be released from my existing property. I will retain my existing property, and this will be rented out. The rent payments will contribute to the remaining mortgage payments, and the additional funds will be used to pay back my parents for the money I have taken out. Approx 7-8 years, and the property will be owned outright.
My DPs deposit will be from the sale of his existing property, and he will retain the additional equity.
All seems pretty much sorted to this point...
The house is need of renovation, and we plan to do extensive extensions to make this a family home. My DP is in the trade and he is going to take a few months off work, to complete the work. Therefore labour will be "free", however the materials, kitchen, finishes will be paid for from DP's savings / equity.
I know you should plan for a happy future, but I want to have a back up / plan for the worst case scenario. I suppose being burnt off my ex has left be cautious. Hence one of the reasons my property is being rented, as this is not in the area I am moving to and would mean I could move back to my area if required.
I propose having a legal agreement, which states IF anything happens within 5 years of the completion date, I retain the deposit and 50% share of the mortgage payments I have paid. The additional value of the property (we are certain the house will increase in value as its in one of the UK desired areas / we are purchasing it below the market value / plus we are doing all the necessary work), will be split between me and my DP. However the % split of this will not be 50/50 and more in the favour of my DP, providing he has done the majority of the work / labour / and used his savings to complete the work. After 5 years this % will increase, but will always take into consideration the additional funds he has used? and the fact that I will "own" another property.
I know all this might sound silly? but I just don't want to get burnt, and neither do i want my DP to invest his savings into the property and effectively give me 50%.