Tenants in common - advice please

ness3765

Since I split from my husband 10 years ago, I have had my own mortgage. It is currently valued at £18000 and my mortgage at £77000. My long term boyfriend who has lived with me for 9 years has always paid me rent each month to pay his way, tenancy agreement etc all above board.
We have now decided to clear our large credit cards by borrowing £30000 more against my property on a joint mortgage.
As I have a large amount of equity established in my house and before this happens I want to protect my share for my sake in case things go wrong between us in the future and for my two grown up children. ( he has no children)
I have heard about Tenants in common agreement, I would like to know if this is the best option for me and how would it work, as technicaly he will be entering this with - £15k
I am very lucky as he understands my concerns
Thanks
Vanessa

holly_hobby

Tenants in common arrangement is whereby the division of legal and beneficial ownership is on an unequal % basis i.e 70/30 or whatever.

There is no automatic transferral of ownership on death of the owner to fellow owners - and as such the individual may bequeath their share to whomever they wish via a will (in the absence of which the laws of intestacy will prevail). The absence of automatic tsf of ownership can cause issues whereby the decd bequests their share to anyone other than their fellow owner, especially wherethe beneficiary wants their share liquidated (ie the surviving owner buy them out or propert sold), or to exercise residency rights).

TIC are commonly used where you have individuals purchasing together whom are not life partners, or, as in your case, wish to have a legal differential ownership noted.

Another/additional way to go about this, would be to effect a trust deed as part of the conveyencing process, whereby it is noted that upon sale, x amount of the proceeds is immediately yours (or to your children on your death), with the remaining equity equally divided between youI(your estate) and partner (or however you wish).

In obtaining your mge to facilitate this equity release, this will be a remortgage with a simultaneous transfer of equity (as you are already a legal owner) - often referred to a a TOE (re the addition of your partner) - which will obviously be subject to status and affordability criteria of the lender being met. You will both be jointly and severally (singularly) responsible for the entire mge debt (regardless of how the actual legal ownership is split)

If you select a fee free remortgage product (basic transfer of title only), the transfer of equity is not included in this and will cost an extra circa £400 - £500-600 - to that end, I would advise also considering products where there are no fees assistance, which when reviewed, may actually result in a saving over the term when compared to a fee free deal (given the extra legals involved).

To that end I would advise engaging a whole of market broker, whom will explain and guide regarding the issues discussed, and source the most suitable product and lender for your requirements (there of course may be a fee for their service).

As a parting comment, and esp as you are un-married, please ensure that you both update your wills (esp if you want your partner to benefit from your estate on death), and effect or at least consider sufficient life (written under trust), income and critical illness insurance to provide in the event of a qualifying event - again your broker or IFA may assist with this.

Hope this helps get the ball rolling for you....

Holly

getmore4less

Have tou sorted out why you have £30k of debt, a remortgage won't sort it if you are still overspending.

To decide what is right path to resolving your debts would be needs a full analysis of the finances.

start with a debtfreewanabee approach and only include refinanceing when the back reasons are sorted.

ness3765

Hello Getmoreless
The reason we have accumulated such debt, was the fact my partner was made redundant 2 years ago, he was only able to seek part time work up until April 2012, now he has a very good and safe job.
Thank you for your concerns and comments about money management. By remortgaging is the only way for us, we have looked into this quite deeply.
I do not wish to be in such debt again, this way I will have the opportunity to save some money and have a safety net should we ever be in this position again.

Holly Hobby
Thank you for your advice/ information I will look into this route

Vanessa