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Overpaying mortgage on joint mortgage

Discussion in 'Home and Garden' started by Fairly sure the answer is no, Sep 10, 2019.

  1. Fairly sure the answer is no

    Sgarrista

    Joined: Feb 12, 2006

    Posts: 9,634

    Location: Surrey

    Hoping someone can confirm for me the below.

    My partner and I have different perctanges on our mortgage as I put 95 percent of the deposit down. This was shown when we took on the mortgage and is clearly defined.

    We can over pay up to 10 percent each year with no costs doing so.

    I'm thinking to try over pay as much as possible, however I'm just wondering say something bad happened and we split in 2/3 years time.

    Would I be now owner of a higher percentage? Or at least would I be able to fight to show my input during the mortgage time has been higher than hers?

    Sounds like a terrible question but from parents experience, and my parents partners experiences with mortgages, I don't want to be another sicker that pays all this money in to lose it should something terrible happen.
     
  2. edscdk

    Soldato

    Joined: Jul 17, 2008

    Posts: 6,652

    You cannot own part of a house (unless you purchase it in a special way that you will not have done) you both own all the house, to split it you either agree between you or you blow 1000s on solicitors and hope a judge favors you.. Its all going to depend on your exact circumstances, the solicitors and the judge
     
  3. RoyMi6

    Mobster

    Joined: Mar 9, 2010

    Posts: 2,607

    In Scotland, when I bought my house with my then girlfriend I put down the entire deposit from the sale of my old flat and we split the house 45/55 on the deeds (or whatever document it was)

    She had savings that made sense to keep liquid for doing repairs and renovating which would mean that over time she'd contribute towards ownership in a more even fashion (which the 45/55 split represented) rather than claiming I "owned 95%" because I paid the full deposit.

    In my mind, I couldn't afford the house without her (income and savings) and we were buying the house together so it made sense from the start to make a more even split.

    We're now married, so the deeds are inconsequential (as everything is 50/50) but, when we put it in place I was fully aware of the fact that should we split (regardless of specific contributions towards the mortgage) she would get 45% of the salve value minus all taxes or whatever. So if we split up and sold the house after 1 month of buying it, she would be getting 45% of all the money I had put in at that point.

    As I suggested above - think about it this way, the only reason you can likely afford to overpay is due to your partners income. Without that you couldn't overpay. So while she may technically not be sending you money to put into over payments, think of your money as a pool and as a couple you're choosing to overpay. I mean, this should obviously be a conversation you're having with your partner but does she want to overpay on the contributions too? It's not your choice to overpay as it's a joint mortgage and if you do overpay from what you consider "your money" (while she is left to spend the extra money she has on whatever she wants) do you think you could really argue your case that she was given a fair chance to contribute?

    All the time you're together she THINKS she's contributing towards ownership (her name is on the deeds) but really behind the scenes you're thinking that she's not contributing anything and wouldn't' be entitled to anything should you split.

    Even if your incomes are massively asymmetrical (like the majorities of relationships I'd guess) her income supplements yours and makes these choices possible for you. For us, because I earned almost double what my partner did at the time, it didn't make sense to keep our money separate. She wanted to pay 50% of the mortgage each month but if she did it would be a disproportionately large chunk of her pay cheque. So it just made sense to pool our money into a joint account for bills and spending money then two separate accounts that each get £200 a month (or whatever makes sense to you) to spend on ourselves. We both earn massively different amount of money but I get the same to spend each month that she does. Obviously we have a joint account that we can discuss about spending on bigger purchases.

    You mention not being taken from a ride, but unfortunately, you've already made your first mistake by putting in place legally binding agreements that you don't fully understand. Saying that, try not to let past experiences of others cloud your judgement. By focusing on the negative possible outcomes you are almost sure to make it happen.

    Be honest, open and communicate with your partner. Let them know your concerns and if it helps you both feel more comfortable don't be afraid to talk to a lawyer about getting formal documents written up that explain contributions - but if you talk about it hopefully you can avoid this added cost.
     
  4. Syla5

    Mobster

    Joined: Feb 13, 2012

    Posts: 4,983

    If you only think it will be 2-3 years then just put the money in to ISA's.
     
  5. tedaC

    Hitman

    Joined: Apr 26, 2006

    Posts: 630

    When buying our first house, I put down £20k more on the deposit. We just got it written up, that if we ever split/needed to sell, I would get my £20k more than my wife.
     
  6. Syla5

    Mobster

    Joined: Feb 13, 2012

    Posts: 4,983

    Yeah but OP now also wants to overpay, implying if the worst happens they basically want what they put in as a %, out as a %, deposit, payment, overpayments and all.
     
  7. psd99

    Mobster

    Joined: Sep 7, 2008

    Posts: 4,674

    Get legal advice for a start!

    but imo if you split - what was setup prior to buying will remain, nothing extra.

    so probably chances are you'd have wasted your money. Just save/spend it on other things
     
  8. Fairly sure the answer is no

    Sgarrista

    Joined: Feb 12, 2006

    Posts: 9,634

    Location: Surrey

    That's correct.

    My partner put £5k into the house deposit, I put £58k. As a result I have approx 56 percent and she 44 percent. This is fair.

    Since buying last year we've spent £20k doing it up, split equally so £10k each.

    We are now getting the boiler done and all the work with that which will come to approx £8.5k. I'm paying this all myself as she's run out of funds.

    I have £30k I'm thinking to over pay of the £360k mortgage that's left.

    My concern is that £30k would be best used to reduce out mortgage as much as possible while I have it spare.

    If we have kids in 2 years, we would lose her income after x amount of time, have 1/2 kids to pay for, and lose the £600 per month we get for letting a room out. That's a big drop so I wish to get as much paid off early as I can.

    But Ive made one hell of a lot of sacrifices to save that much in the last year. I want to spoil myself, but I know there's time for that in the future.

    However any extra I pay I'd hate to risk losing it should something bad happen.

    I'll get legal advise. What type of company should I search for?
     
  9. Russinating

    Capodecina

    Joined: Dec 27, 2005

    Posts: 15,218

    Location: Bristol

    To be perfectly honest, I think there's bigger issues if you're protecting yourself from a split whilst planning for children (and their subsequent separation) in the same paragraph (imo).

    You can't really go into a relationship and plan for it to fail. If you do it basically will.

    Everyone's different but I don't understand how you can own a house together but don't have a joint account, because all these sorts of 'issues' disappear when what's yours is hers and vice versa.
     
  10. The Craig

    Soldato

    Joined: May 4, 2007

    Posts: 7,497

    Location: Warwickshire

    Mans got a point.

    Whats the interest rate on your mortgage? Would a high savings account be similar? E.g. I have 1.5% savings but 1.65% mortgage. I choose not to overpay as id like a cash buffer, costing me. 0.15% (im not near next LTV band). Alternatively if long term could put it into atoxks and shares.
     
  11. Dolly

    Gangster

    Joined: Jan 12, 2005

    Posts: 270

    Location: Cambridge

    Yes, it is possible to do this OP. You will need either a Declaration of Trust (which defines your beneficial interests and/or can set a formula for doing so based on respective contributions) or a Cohabitation Agreement.

    A Declaration of Trust will deal with the property only and is the most straightforward. You will need a property lawyer to prepare this (NB: I do not mean a conveyancer).

    A Cohabitation Agreement is all encompassing and covers the property as well as other matters - eg running of a joint account, contents division, etc and sets out what would happen if you split - think of it as a prenup for people who are not married (but is enforceable whereas prenups can be departed from in certain situations).
     
  12. Syla5

    Mobster

    Joined: Feb 13, 2012

    Posts: 4,983

    Serious underlying issues, maybe just your end, or maybe they pre-exist in the relationship.

    The safest thing you can do for your money is to put it in to ISA's. The interest earned will offset the interest paid on the mortgage to a point, so while you might not be saving as much money on interest, the cost impact is going to be very minor, and the money is all yours.

    Sad though that you feel the splitting of everything needs to be done 50/50. Do you earn the same amount of money? Is that an equal split of your incomes being put in to the house? Or do you only contribute 30% of your income while your partner contributes 70% of hers?
     
  13. peige

    Mobster

    Joined: Oct 18, 2002

    Posts: 3,221

    Location: Sussex

    If your worried about a split now I'd keep the money, if you sink it into the house without involving sol's again then you won't get more back and if its a split with kids she will end up in the house and it gets worse and worse down that line.

    I'd worry more about having kids in a situation where you think you might not be together in two years, kids don't make things better, they stretch things and stress things. If its shakey now its going to break when a baby comes along.
     
  14. Fairly sure the answer is no

    Sgarrista

    Joined: Feb 12, 2006

    Posts: 9,634

    Location: Surrey

    has anyone signed a prenup before a marriage? why do they exist if you're all saying that this means there are issues and will end up with a failed marriage?

    you're all being naive to suggest that you shouldn't look to protect your input as sensibly as you can.

    just checking online. 42% of marriages end in divorce. I guess those 42% must be the ones that took out a prenup, if only they'd known that prenups = breaking up.

    maybe you lot aren't thinking of the amount split but just that i'm suggesting a split at all. ok if i spent £10k while she spent £5 i'd not worry to evenly split this.

    thats not the case. i'll spend £100k while she spends £15k, not even close. there's a lot of things i could spend that money on but i don't. i'd like to get rid of this mortgage as soon as possible, but not if it means i risk losing my share of the input. i feel terrible for those dads that buy a house, have kids, relationship breaks down, then dad gets kicked out.

    we're not on the rocks don't worry guys :)
     
  15. Fairly sure the answer is no

    Sgarrista

    Joined: Feb 12, 2006

    Posts: 9,634

    Location: Surrey

    is this something you get after purchasing as is the case here?
     
  16. Psycho Sonny

    Caporegime

    Joined: Jun 21, 2006

    Posts: 30,372

    pre-nups don't actually override anything and are useless.

    do you not thing paul mccartney would have had one in place, as well as every other rich guy who has been taken to the cleaners? tiger woods, etc.

    basically when you get married you are making a legal vow to split everything with your wife. which is why that essentially overrides everything else.

    so if you are thinking you need to protect yourself. then you must have some reservations about how malicious your partner can be. as a reasonable person would say yes you spent the majority on the home so you should get the majority. however if you feel the need to protect yourself then it doesn't look good.

    which is why a lot of people have said what they have said.

    if you aren't married and you can legally show you paid for the majority then you would likely win in court but it's nor guaranteed. if you are married she will get half regardless of what you think it is you have in place.
     
  17. BUDFORCE

    Wise Guy

    Joined: May 3, 2012

    Posts: 1,121

    As much as I hate to say it, I actually agree this also.
     
  18. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 8,950

    Location: Wilds of suffolk

    I think we need to keep this constrained to UK law, as far as I knew Tiger was never a UK citizen and that parts if not all of the US do allow pre nups.

    Back in the UK..
    They do not have legal weight, but they can be used as indicative as can living together agreements.

    The default position in UK law is that all assets are pooled on marriage and that they are split equally on divorce.

    However when it comes to things such as property its completely valid to have ownership thats not 50/50. It just requires more work up front in order to show that clearly both parties have agreed to work a certain way and that the 50/50 does not apply.
    This is normally when one has placed a large deposit, or used another property as a deposit etc.

    Edit i forgot the legal terms, this link which highlights the tenants in common (default for unmarried) can be applied to married as well, who are normally treated as joint tenants
    https://gw.legal/marketing/your-guide-to-owning-property-together.pdf
     
  19. Admiral Huddy

    Don

    Joined: Feb 17, 2003

    Posts: 29,278

    Location: Chelmsford & Broadgate

    I'm all for overpaying your mortgage whilst rates are extraordinarily low and while you can afford it. We shaved 9 years off our mortgage and have been mortgage free for nearly 4 years now.

    As for the event of any split, you have to ask yourself that although you pay the majority of the mortgage, would you be able to do so if your partner wasn't contributing to other household costs? It has to be seen as an overall picture and the total cost of household expenses and not just the mortgage. For example, I paid for all the bills and mortgage, whilst my wife paid for all the kid clothing and weekly shopping. I wouldn't have been able to over pay on the mortgage had she not done that so I would have been happy to agree 50% .. regardless.

    I would seek legal advice with a pre-nuptial agreement now because of you can't agree now then you certainly won't in the event of any split. I was under the impression that most solicitors advised this when couples buy nowadays anyway.

    Hope it works out though.
     
  20. Fairly sure the answer is no

    Sgarrista

    Joined: Feb 12, 2006

    Posts: 9,634

    Location: Surrey

    yes if married that's true. at the time i'm making that commitment it'll be something i'd have considered and everything it means to get married :)

    at the moment we aren't married and are what feels like a long way away. various reasons, but partly i'm not sure how much i believe in it, so should the worst happen, divorce and all that comes from that may never be an issue if we don't get married
     
    Last edited: Sep 11, 2019