-
get a deed of trust drawn up that says if the worst happens, she receives her deposit back
I think it's better to have one that says you get back in proportion to what you put in.
This one caught my sis out. She and her ex split the mortgage but she put down all the deposit, about 40K.
They split up after 2 years during which the house had gone up by 60K. She took back her 40K and they split the profit in half.
Guessing about 10K each in mortgage payments, she made 30K on a 50K investment (still not bad) while he made 30K on a 10K investment.
If the market falls, the deposit - putter would be worse off with this arrangement, but it's still fairer than the other way which would have the person without the deposit taking a bigger loss to protect the other's deposit.
TL;dr the person with the bigger stake should get a bigger share of any profit or loss.
brokenbetty-
I think it's better to have one that says you get back in proportion to what you put in.
This is what I was getting at before. It would have been better for you sister, but worse for the BF. That doesn't necessarily make it more fair.
(although all other contributions being equal I'm more drawn to this option).
hugo7
@rogan
If I may speak from mine and my other half's experience.
Prior to me buying into the flat, she owned it with a friend. They put down inequal deposits (12k vs 9k - it was 2009!) and owned the flat as tenants-in-common and had a deed of trust drawn up. As they were paying 50/50 on the mortgage and the maintenance of the falt, the deed said that if/when they sold they would first receive their initial deposit amount back, then any increase in value (profit) would be shared equally.
So when I bought in, due to the intricacies of mortgages, essentially my other half and her friend sold the flat to me and my other half. Their profit from the sale was fairly hefty, so the friend received just over 100k and my other half received just under 100k (in-equal deposits returned). I put in 0 (I know, I know), and we intended on having a deed of trust drawn up so that if something bad happened to the relationship then she would receive her just under 100k back first then split the profit 50/50. However because we went with the mortgage provided conveyancer, getting a deed of trust drawn up proved to be a little difficult, and in the end we didn't get it done. Our thinking was, she had the more to lose (much more) and she trusts me that if we were ever to break up, I wouldn't me a massive cunt about it. We were already pretty set that we were going to get married even though we were not yet engaged, so that made it easier, and I know there's no way even if the relationship goes sour that I could fuck her over, no amount of money is worth fucking someone over, that's just they type of person I am, and she knows that about me.
In your particular example, if you're needed to get the mortgage, but no deposit is required then the renting setup obviously isn't going to work.
I would recommend that as suggested by others, you get a deed of trust drawn up that says if the worst happens, she receives her deposit back, but here's the clincher: You need to decide how much you're paying each, not just mortgage, but upkeep too. Open a joint account, and pay in your standing order every month. The mortgage gets paid from the joint account, and you use the surplus for house expenditure, if you're not paying in equal amounts I'd say don't use the joint account for things like grocery shopping, meals out, and drinks because then you're paying more for nearly all aspects of life, rather than just the house. Using the amounts you're paying in, you work out what % of the profit you will each receive if/when you sell. I think if that's really that unsatisfactory to either her or the parents, maybe they want to consider guarantors instead of getting you involved.