Real Estate

Fair way to purchase property with boyfriend

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  • Jun 1st, 2016 3:14 pm
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[OP]
Deal Addict
Feb 9, 2013
1833 posts
988 upvotes
Mississauga

Fair way to purchase property with boyfriend

My boyfriend and I have been dating for some time. We are looking to purchase a property in $600,000 range.
I have 20% down-payment saved up, and have high salary than my boyfriend.
My boyfriend has no savings as he just started working.
We are thinking of purchase a place to live together, then eventually getting married.

What are some ways you divide property fairly with your significant others? In terms of down-payment and paying mortgages?
47 replies
Deal Addict
Apr 15, 2004
1603 posts
149 upvotes
Toronto
well ideally your bf should have matched downpayment and it should be split up.
not to sound bad but you need to plan for "when things go bad" strategy as well. both of you should know the consequences well ahead in advance if anyone decide it call it quits
Deal Expert
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Jul 30, 2007
31268 posts
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Toronto
very bad idea if you put in 20% and he puts in almost 0. Like the above poster said, "... what if .... "

If you two are urgently looking now, then ask him to come up with 5% (borrow from his own family if needed) and you put in 5% for equal partnership into a MAJOR asset.
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Jul 11, 2011
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...marking this thread so I can come back in a year and see how bad this one worked out...hebs
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Dec 21, 2010
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GTA
Have you factored in common expenses (utilities, food, repairs, etc..)?

I was in a similar situation with my husband (then fiance) and I had the financial upper hand (still do). I would not invest prior to a firm commitment otherwise I would have made the purchase on my own and shared common expenses.

If you make the purchase now in your name, he can be added to title at a later date. If you split, he will only be entitled to the proportionate increased amount of the home at that time (from my understanding of the law and matrimonial home).

I would not encourage a purchase at this point until he can match you financially in this type of an investment.
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Aug 2, 2010
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Here 'n There
jdu0ng wrote: My boyfriend and I have been dating for some time. We are looking to purchase a property in $600,000 range.
I have 20% down-payment saved up, and have high salary than my boyfriend.
My boyfriend has no savings as he just started working.
We are thinking of purchase a place to live together, then eventually getting married.

What are some ways you divide property fairly with your significant others? In terms of down-payment and paying mortgages?
I agree with loriblum. I can't believe I said that!!!! ;)

Gifts aside, the 'fair' way is to own it according to what you contributed to the down payment. You contributed 100% of it so you should own all of it. As for the mortgage payment entitling him to ownership, well he'd have to pay 1/2 the rent (or maybe less because he's not earning as much as you) anyway if you rented a place together so you should just have him pay you 1/2 the rent you paid before as the only reason you are buying a place is because you are able to finance it. That way he isn't paying 1/2 of the higher cost of carrying the place. You will be burdening yourself enough with the extra insurance, utilities and upkeep. Once you move in if he contributes anything to upkeep, renovation, does work around the house, etc, he will become entitled to part of it (talk to a lawyer).

Of course if you want to give him a gift by giving him 1/2 ownership without contributing anything to the downpayment, well that is a totally different story and has nothing to do with 'fairness'. That's your business whether you want to do that. Just don't expect him to hand you back half the house if you guys break up. Believe me he won't.

50% of couples who are married split up. The % is even higher for unmarried but living together. But love is blind (and deaf and dumb and ...)
Deal Addict
Apr 4, 2013
1274 posts
409 upvotes
You have several options:

1. Split Costs 50/50. This is the equal way to do things, but is sometimes not fair. It doesn’t take into account different income and savings level. It usually means that the spouse with the higher income has to accommodate the lower income spouse.

2. Proportional Split Costs. This seems fair - you contribute based on what you earn. This allows lifestyle improvements due to income differences, but it doesn’t take into account major life events like a sudden job loss, career change, children, or disability.

3. Just Combine Everything. This allows for a higher standard of living as you avail of the purchasing power of combining incomes. Each partner contributes whatever they can. The challenge with this approach is usually around decision making, with many partners not fully realizing “our” money and seeing only “my” money. The reality that this power imbalance will exist whether you share money or not - it just won’t be around money.

There is no right or wrong answer as it will depend upon your personal relationship. As you have indicated that you are planning to get married, you should think long term. Relationships all have challenges that will require couples to accommodate and make changes. As mentioned, you may have children, one person may have a wonderful job opportunity that will require the other to abandon their career….these are real life situations that many couples have to face.

FYI - In ON, once married, the matrimonial home is owned and shared equally. It doesn’t matter who paid what or who contributes what.
Member
Jun 2, 2007
438 posts
78 upvotes
Toronto
Don't buy a home until you are married unless you are prepared for an incredible headache if you break up.
Deal Addict
Mar 7, 2010
2632 posts
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Mississauga
even if you don't mind investing in everything, you have to factor the expense like previous said
600k property has huge expenses
Deal Guru
Oct 7, 2010
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quick90 wrote: Don't buy a home until you are married unless you are prepared for an incredible headache if you break up.
This! But let op learnt that hard lesson when it does happen. No one in their right mind put 20% and have higher income to split with bf. Even a husband or wife is risky, not to mention possible spousal support.
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Jul 6, 2008
632 posts
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Toronto
Wait...girl is buying house for boy? This is new territory for me. Most of the time it is the over way around, mortgages and down payment from the guys and their partner pay the house expenses.
Deal Guru
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Mar 9, 2007
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Think of the Childre…
jdu0ng wrote: My boyfriend and I have been dating for some time. We are looking to purchase a property in $600,000 range.
I have 20% down-payment saved up, and have high salary than my boyfriend.
My boyfriend has no savings as he just started working.
We are thinking of purchase a place to live together, then eventually getting married.

What are some ways you divide property fairly with your significant others? In terms of down-payment and paying mortgages?
Best thing to do is get a Prenuptial agreement from a lawyer. Yeah might cost a few but it might be worth it if you two decide to toss your relationship in the bucket.

WOULD SOMEBODY THINK OF THE CHILDREN!!!
Sr. Member
Aug 6, 2014
830 posts
300 upvotes
Ottawa, ON
jdu0ng wrote: My boyfriend and I have been dating for some time. We are looking to purchase a property in $600,000 range.
I have 20% down-payment saved up, and have high salary than my boyfriend.
My boyfriend has no savings as he just started working.
We are thinking of purchase a place to live together, then eventually getting married.

What are some ways you divide property fairly with your significant others? In terms of down-payment and paying mortgages?
split up mortgage payments however you want, but open a joint account for payment so you can track how much each person has contributed. if things go sour, maybe add up how much each person has contributed to the mortgage so far and then you can figure out how much % each person owns in the house. then when you sell the house you can split up the proceeds accordingly. or if one person wants to buy the other out, you'll know roughly how much it'll cost. or if you both want to keep the house and can afford to do it, you can toss a coin or fight to the death or whatever young people do nowadays.
Deal Guru
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Mar 31, 2008
12636 posts
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Toronto
Not a good idea. #1 issue during any separation proceedings. Have to treat it like a joint partnership with contract rules. Or have him 'rent' the house, while you take care of everything else. But it dissolves once you guys get married and it becomes the matrimonial home.
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Jul 12, 2006
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Where are all these sugar mamas? I am so handsome and sweet like the fresh dew on the cheek of a fair-haired newborn (but cleaned up and nice smelling). Yet no sugar mama.
Deal Guru
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Mar 23, 2008
13002 posts
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Edmonton
My GF and I are buying a house together too. She has the downpayment, I have the monthly income.

We'll be getting a "cohabitation agreement" written up. The basic premise will be that if we do split up, she gets her downpayment back first out of the equity, and then we'll split the remainder 50/50 (she will be contributing to the household expenses). A 65/35 ratio is what we've used in the past, and that's based on our incomes.

I'd definitely advise getting something written up "pre-purchase", looking at the "what if" scenarios. It sucks to think about them, but you need to be practical too.

My sister lived with her BF for years as well, and he owned the house they lived in. She paid him rent which was less than market value, and when they split up, she didn't feel the need/desire to take any payments from him. And she's a lawyer... :)

So it can be done... But best to get things in writing first.

C
Deal Fanatic
Nov 24, 2013
6241 posts
2987 upvotes
Kingston, ON
I forget the term for it, but your real estate lawyer on the house deal can definitely draw up an agreement between the two of you. When we bought our first house 7 years ago, my wife and I were a couple months shy of our wedding, and the source of downpayment was inheritance she had received. The lawyer changed names and info on a canned agreement where, basically, as she was contributing $x as the down payment, that if we broke up / sold the house that she was entitled to the first $x of any equity in the house, and then 50% of the remainder.

We never needed to use it, of course, but it's easily done. You're dealing with a lawyer anyways for the house close.
Newbie
May 23, 2016
42 posts
45 upvotes
If you really need to make this work, you need some trust and understand that you make more money than him and therefore you will need to pitch in more than him, proportionate to the salary. Anything else will never last long term as the money will be a wedge between you two that will kill the relationship eventually. So you have a couple options.

Option 1: Trust that your relationship will work out for good. You pay the down payment and divide up the expenses in line with your income difference. You don’t want to force him to pay 50/50 if you make more than him because that will just create problems in the future and will definitely break you up.

Option 2: Same as option 1 but get something drawn up saying you own 20% of the house and the 80% is 50/50 between you to. To me this is the fairest and he should be ok with it. However, all expenses should again be split in line with income otherwise he would either be taking on too big a burden if 50/50.

Option 3: buy the house under your name and have him pay some of the expenses as rent. If you go with this, you should have zero doubt in your mind that you will break up because you will.

My girlfriend and I are looking at buying a house. We are pitching in 50/50 on everything and our salaries are close (52/48 in her favour) so not a burden. But if one of us were to be promoted tomorrow and they make twice as much, expectation is they will pitch in more. Anything else would simply not work out because then you would be thinking about the relationship in terms of a business arrangement and that's the end of it.
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Mar 22, 2007
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Damn J is off the market
hated on but respected.
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Apr 21, 2004
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Maybe BF is on RFD? :)

With so many marriages ending in divorce (I am hoping your relationship will blossom), probably best to heed some advice here on legal matters.

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