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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33813
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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I am planning to buy a house with a friend (not a legal partner),

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I am planning to buy a house with a friend (not a legal partner), with my share being 2 thirds of the total cost, and hers one third. Because of an inheritance I can afford to pay all or a large portion as a deposit, whereas my friend has only very small savings but a larger monthly income. I would like advice about a) setting up a contract between my friend and myself for ownership of the property, etc, and also whether it is possible to have separate mortgages, and any other advice you think useful on this proposal!!
Submitted: 1 year ago.
Category: Law
Expert:  Clare replied 1 year ago.
HiThank you for your questionMy name is***** shall do my best to help you but I need some further information firstWhat proportion do you intend to pay mortgage in?
Customer: replied 1 year ago.

Say house is £300,000; I could pay £150,000 deposit, and get mortgage for £50,000; friend might pay 10,000 deposit, and get mortgage for £90,000.

Expert:  Clare replied 1 year ago.
Hi
It is not possible to get separate mortgages I am afraid,however you can of course pay the mortgage in different percentages
Have you decided how you and your friend will share the "profit"between you.
Are you each going to have your investment back and then the rest shared between you?
Clare
Customer: replied 1 year ago.

Hmm. When you say investment back, I assume that would involve deposit plus amount of mortgage paid off by each person over the years. Any profit when house is sold would involve sharing on the basis of what each person had invested (i.e. total deposit plus mortgage payments worked out as a percentage0). Does that make sense?

Expert:  Clare replied 1 year ago.
When two (or more) people own a property then they actual hold it on a "trust for sale" Since you are friends rather than living partners you will hold it as Tenants in Common with each of you owning your own part of the property and being able to leave it to whoever you wish.You can hold it in equal shares - or in unequal shares (as you will)If it is unequal shares then the Deed setting that out need sto be cleat - and the calculations need to be relatively straightforward.There cannot be two separate mortgages - but of course you can each pay different amounts towards the mortgage.You have a number of optionsOne of the easiest is an agreement that on sale you will each have your deposits returned and then the balance will be divided between you in the same proportion that the mortgage was paid.Of course the other option is that the deposits are returned and the balance divided in the proportions which reflect the overall investment.This ensures that if there is an early sale then your deposit is safe but that the overall return is as expected.I hope that this is of assistance - please ask if you need further detailsClare
Clare, Solicitor
Category: Law
Satisfied Customers: 33813
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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