Q I am about to buy a house with my boyfriend. He is putting up 70% of the deposit and I am providing 30%, and we have agreed ? given that we are not married ? that a tenancy in common agreement would work best for us.
The problem I have is trying to calculate how to split the mortgage repayments. I earn nearly three times more than him a year, but he has a larger deposit to put down from previous property sales. He has suggested I pay a larger chunk of the mortgage repayment a month ? but this would not increase my equity in the property.
I am happy for us to have a 70:30 split on the sale price/any profit based on the equity split, but I can't see how it is fair for me to pay more than him each month, even though I take home a bigger salary. I don't want to lose out just because I have a greater earning capacity. An equal mortgage repayment sounds more fair, and we split all other bills this way. How do people usually calculate mortgage repayments fairly in this scenario? CB
A If you have an interest-only mortgage, the easiest approach is to split the monthly payment down the middle, as you do with your other bills. This is because you are only paying interest so it is just a cost of living in the house like, for example, council tax is.
However, if you have a repayment mortgage then part of your monthly mortgage payment is repayment of the money you borrowed, so you gradually increase your equity in the property as the years go by. For this reason, I am a bit concerned you think that your share of the mortgage would not increase your equity, because it should. Also, your share of the deposit should not dictate the final equity split if you were to sell up. You have to take account of the mortgage as well.
A fair way of working out your share of the property when you come to sell is to add the amount (in pounds) of your deposit contribution to the amount of the mortgage you will be taking on, and divide the result by the purchase price of the property and multiply by 100 to get your percentage share.
Source: http://www.guardian.co.uk/money/2011/oct/19/how-split-homeownership
Motoring Xabi Alonso US healthcare Burlesque Television Iran
No comments:
Post a Comment