Buying a house as a couple: How to legally protect yourself in sharing costs?

If you need assistance with home credit issues, you can always turn to a credit intermediary for free, such as Poupança no Minuto. But better understand how to proceed with this specific issue, next.

I will buy house number 2, but I will give a higher value. What happens?

If you are still going to buy the house with another owner, and have a higher available capital to contribute to the purchase of the property, there is a preventive solution to establish equality between the parties.

In these cases, when writing down the property, with or without a housing loan, you can proceed with the division of the house's property, corresponding to the percentage of value that each one contributed. That is, if the property costs 200,000 euros, and one person paid 150,000 euros, while the other paid 50,000 euros, they can agree that the property will belong to them 75%/25%, respectively.

This is a preventive situation, to protect yourself before buying the property, but what happens when you have already acquired the property without the division?

I already bought a house for two, but only I paid. And now?

This is a common situation: When you buy a house with more than one owner, but the down payment or total purchase price is only paid by one of the borrowers, there is an inequality. This happens when the paying borrower expects the other to pay a part of that amount later.

If you have agreed with the other party that they will return part of the debt, it is important that the agreement be in writing. So, is there a way to legally protect yourself in this situation? The answer is: Yes!  

But what is this entry value? And what can be done, beyond just words, for the holder who does not give any value to the purchase of the house, to commit to paying the amount in question?

Mortgage credit: What is the necessary down payment amount for buying a house?  

Clarifying first, the entry value needed to buy a house: This occurs when financing is sought, and a housing credit is requested from the bank.  

This is because currently, banks do not lend 100% of the value of a property, but at most 90% for permanent own housing and at most 80% for secondary housing (of the lower value between acquisition or appraisal).

In other words, imagine that the property, for own and permanent housing, has an acquisition value of 300 thousand euros and an evaluation of 310 thousand euros. If the bank lends you 90% of the lower value, you still need 30 thousand euros (10% of 300 thousand) as the amount you will have to give as a down payment for the purchase of the house.

So, if you buy this property with another borrower, and pay off the 30 thousand euros alone, the second borrower will have to give you back 15 thousand euros (if they decide to split it evenly). But how to ensure that you legally receive this amount back?

How can I legally protect myself to receive back part of the value?    

After all, how can one legally protect themselves in cases where they want to split the value, either as an entry into the property or the purchase of the total value of the house? By resorting to a contract, which is then legally recognized. Let us explain:

In cases where a home loan is contracted by two people, whether married or not, without being legally married or in a civil union, or even when purchasing a house without financing, it is difficult to have guarantees between the amounts paid because they are not situations provided for by law.

This is why one should proceed with a legal contract, where the situation is defined, with the respective values paid and to be paid, and by whom.

This contract can be drafted by the parties themselves, for example through a template, but it must always be legally acknowledged by a notary, lawyer, or solicitor. 

You can use, for example, a draft of a debt acknowledgment and payment agreement, to be signed by both parties and then legally recognized.

This contract, when recognized by the notary, lawyer or solicitor, is valid so that, if breached, it can be taken to court. Therefore, even knowing and trusting the other party, if something goes unexpectedly and unforeseen, this document ensures that you are legally protected and receive the repayment of the debt.

Need help moving forward with this procedure? The credit intermediaries from Poupança no Minuto can take care of everything, without you having to worry about paperwork, bureaucracy, communication, or challenges in the credit process. Contact us and proceed with the process today.