Almost at exchange, Tenants in common? or joint?

Dave_6

UPDATE near bottom



Hi,
Getting very close to buying our first house, exchange + completion.
Received various bits in the post from solicitor that need signing, land registry transfer form, mortgage deed etc

They’ve also asked if we will be joint tenants or tenants in common.


At the moment we are heading towards tenants in common unless someone thinks we’re missing something?
Hoping the solicitor wont want a lot of money to draw this up…..


Situation,
Both FTB, unmarried couple, no kids, no loans or debts. We will be splitting costs right down the middle and using our joint account for all bills + mortgage.
Both putting in the same amount to the account each & every month, just how we did when we rented.


Buying house for 155k
Mortgage will be 131k

I am then putting in 11.5k
Otherhalf is putting in 16k



The spare money will be placed into our joint account + used on house improvements.
So my otherhalf will have put in 4.5k more than me out of a total balance of 158.5k



Trust Deed option we’d take is where the shares in the property are agreed as percentages. Property subject to a mortgage
So she will effectively own 51.4% of the house, I will own 48.6%



Does that all seem to make sense, can we keep it that simple or does it need to cover much more.
Solicitor will obviously help clear all this up but its nice to know in advance I guess



Thanks
Dave

poppysarah

Decide what will happen when you split up.

Dave_6

Or have I got that wrong, I’ve worked the percentages out over the full 158.5k that we’re putting in.
But if its just worked out on cash we’ve put in, so the 16k + 11.5k
Then she would be at 58.2% and me 41.8%


Splitting up, I think we would sell the house but need to discuss that option

Beckyy

Personally, I'd just put it in joint tennacy if you're happy with your relationship together (which I assume you are if you're buying a house). Surey it's only relevant if you split up? Or does OH want her exact amounts outlined?

poppysarah

Beckyy wrote: »

Personally, I'd just put it in joint tennacy if you're happy with your relationship together (which I assume you are if you're buying a house). Surey it's only relevant if you split up? Or does OH want her exact amounts outlined?

Yes it is only relevant if you split up.
But as that happens (sadly) more times than I care to think about, it's probably worth talking about it and getting it in writing first.

kingstreet

Unless I'm going soft in my old age, the only difference between TIC and JT is who gets your share on death.

JT your share passes to the other joint owner, TIC it passes into the estate of the deceased.

I don't think you need to go TIC because you're putting in different levels of deposit. Prepared to be corrected though.

keithdc

poppysarah wrote: »

Decide what will happen when you split up.

Or... indeed... IF you split up!

hazyjo

Not sure how you can count a larger contribution to the deposit as meaning you'd be splitting the actual value of the house. Why don't you just own half the house each, and draw something up (if you really want to) to say what your deposit was, and what hers was (for if you split). If prices have dropped, take a percentage in accordance with your deposits, not from the whole house. At least that's my logic anyway...

Really, if either of you are worrying about just a few thousand difference at this stage, what will happen if you have kids and she gives up work, or goes part time? I understand she might want to protect the extra £4.5k, but only £3k of that is actually going on the house (by my calculations). You really can't count the money that's going on say furniture or decoration as part value of the house. Maybe delay this until you can match her amount, or she pays the first £1500 for stuff, then you pay the next. Personally, I'd just be lumping it all in together and saying it's 50/50, but that's me, and maybe being married makes a psychological difference, I dunno. Hubby and I just pay for whatever by whoever. Sometimes I'll pay for a holiday, or he'll pay for the sofas. Whoever's having a more flush month will foot the bill, basically!

Obviously prices go down as well as up. Work out what happens if you're in negative equity when you sell (would she really want to take a larger percentage of the whole house's debt just cos she put in an extra £3k initially?!).

Sorry if I'm missing something... it's how I'm reading what you've said.

Jx

heathcote123

poppysarah wrote: »

Decide what will happen when you split up.

Thats the spirit

poppysarah

heathcote123 wrote: »

Thats the spirit

I do have to get up early to practice being so pessimistic you know! It isn't natural! :-)

Dave_6

Thanks for replies so far

I think she's been told by a couple of people that you are covered better personally if its tenants in common. So if you split you're covered, I dont think the small extra bit of money is an issue, more a case of trying to be sensible so if we ever did split things dont go horribly wrong and we end up posting on here argueing our cases for who gets what


I think this is maybe how it could be done…
At a guess if we split we would agree to sell the house, or that one tries to get a new mortgage but would then also have to buy the other one out so they got their deposit back + % of the mortgage they’ve helped pay off.
If buying out option then house would need to be valued and remaining value of mortgage taken off of that value. E.g. 155k – 131k mortgage. 24k left over. That figure would then be split by the percentages that were previously agreed to work out how much the buy out value would be.



If we split and agree to sell, one would probably move out straight away. House could take a year to sell and mortgage would still need to be paid. But person whos moved out wouldn’t want to pay 50% of the mortgage as they aren’t getting the benefit of living there. Out of our £700 monthly payment £450 pays interest, £250 goes on actually reducing the loan.
So I guess in that situation the person staying in the house would pay maybe 75% of the mortgage (£525) and the person who’s moved out would still need to contribute as the mortgage total is still going down so maybe 25% and so (£175). That way the mortgage amount is reducing by £250 each month and both parties are contributing to it going down.
That way person whos moved out is still contributing, although they don’t live in the house the mortgage is still going down each month and so as they benefit when house is sold they should still contribute to mortgage going down.

I think that kind of makes some sense and is the main thing to cover, is alot of threads on here are about break ups and the person who has moved out just doesn’t pay anything at all anymore towards the mortgage which causes problems and doesn’t seem right as the mortgage is still reducing but only one is contributing


I thought the deed for tenants in common could cover this? or could we just go joint tenants and produce our own document thats signed + witnessed etc basically saying the same as above or whatever we agree