Tennants in common troubles

RAS

What you need to understand about joint debt is that you are both liable for 100% of the debt. What you need to get proper advice on is whether tenants in common has any bearing on this, because the debt will be a joint mortgage, I assume?

PasturesNew

If you break up in NE, his deposit would be the first thing to go.

If you're buying at £100k and he's putting £20k down ... and the mortgage is for £80k... if you split up and sell off at £80k you both walk with nothing.

If, however, you split and it was sold for £60k then you'd both owe £10k apiece, so you carry the debt equally between you once all of his deposit's been eaten up. So he's bearing the first £20k of loss.

thorsoak

If you're arguing about splitting the proceeds after separation before you have even bought the proprty - I would walk away now and buy on my own!

njh82

we aren't arguing over it , we are discussing it but its a huge amount of money and not a situation to enter into lightly given the current housing climate. So sorry but I don't see it as a reflection of our relationship I see it as ensuring we are both protected should it not work out. I don't see the problem with that?

tyllwyd

Maybe you would both be happier if you both put in something towards the deposit - you said you are planning to spend money on renovations. Could you put that on hold and work something out between you both so that you both contribute closer to £10K each to the deposit?

WorzelG

njh82 wrote: »

we aren't arguing over it , we are discussing it but its a huge amount of money and not a situation to enter into lightly given the current housing climate. So sorry but I don't see it as a reflection of our relationship I see it as ensuring we are both protected should it not work out. I don't see the problem with that?

I agree. There is nothing wrong with discussing things in a completely neutral manner. Taking your relationship out of it as much as you can.

The important thing is you are both happy with it in the end.

surreybased

Hi,

Just wondered if you could talk through actual scenarios and see what you would want to happen.

i.e house purchase £100k, sell in 2 years - house now worth £90k
i.e house purchase £100k, sell in 10 years - house now worth £135k

It is very sensible to have this conversation now and not rely on assumptions. I think it's the timing that concerned people. Rather than decide on an actual split could you agree a %rate increase for the deposit - assume 3%. This figure is paid from any future house price increase (if any), then deposit, then profits.

btw, good luck on the purchase and relationship

Some thoughts on migitaging the risk:
1.Have lived together before rather than buying straightway
2 Have been together for at least 2 years and are not ignoring any 'red' flags in the relationship
3.Have a positive reason for buying together - we want to make a committment to each other rather than - we're tired of renting solo and its possible for us to buy if we do so jointly

Nixer

Sorry, off on a slight tangent, but are you completely sure you want your respective families to get your x% share of the house should one of you die?
It might mean that the survivor has to move out if they can't buy out the family's share, or the family forces a sale. Presumably the family aren't on the mortgage either so you would be liable for the full mortgage payment on a house you don't fully own. Or am I completely wrong about that?

DVardysShadow

njh82 wrote: »

Basically he has put in a 20% deposit towards our joint mortgage on a one bed flat.

So 80% on the mortgage

njh82 wrote: »

As I am paying half the mortgage re-payments each month and putting in half of the rennovation costs I would like to have an agreement which states if we were to break up and sell, we would pay off the mortgage, he would get his deposit back and then anything left would be split 50/50.

If you are paying half the mortgage, then you are funding 40% of the house - you are renting 40% of the money and he is renting 40% and paying 20%.

So your split is 60 - 40. You should split the renovation costs the same way. When you sell, you should take profit 60 - 40 and you should split Negative Equity 60 - 40.

njh82

Thanks, well we have been together two years and have been living in rented for a year and a half. We want to get married in the future and both see the future together, so hopefully that answers the mitigating issues.

With regard to 60/40 , th emain issues with that is he can;t affrord 60% of the rennovations and I would still be paying 50% of the repayments ?