Help! Tenancy in common confusion!!!

Younghousebuyer_2

Hello,

Myself and my partner are hoping to buy a property together soon - we are both first time buyers. We have received a mortgage in principle agreement based on our combined incomes (we currently have equal incomes).

As my partner has a much larger deposit than myself and we are not married, we thought that buying the house as tenancy in common rather than shared ownership would be better. Although I understand the basic principles of tenancy in common, there are a few things I'm not sure of......

1. What stage do we select to be tenants in common.. Is it just when we choose a property and go to the solicitor? Or do we have to go back to our mortgage lenders and apply for 2 separate mortgages?

2. If my partner has more of a deposit than me, will he pay less monthly mortgage instalments, own more of the house (e.g.60/40), or just simply get a larger deposit back when we sell?


Any help and advice would be really appreciated! Thanks!

headachesrus

Whenyou instruct your solicitor, tell him you want to hold the property as tenants in common, and he will sort the paperwork out (it is just ticking a box for him).


Tell him as well that you are putting in different amounts of deposit, and he can draw up a deed which states that in the event of a split, you will each get a certain amount back. It can either be exactly what you are putting in now, or a percentage of any profits split say 60/40.


You will apply for one mortgage jointly.

kingstreet

You tell your solicitor what route you want to take when you have agreed to purchase a property. It's tenants in common or joint tenancy, shared ownership is something totally different.

In addition, you need to have a deed of trust drawn up which will deal with what happens in the event of a split with a profit, loss etc.

Finally, as the deceased share will pass into their estate on death and not to the surviving owner as it does with a joint tenancy it is essential you write a will.

This has no impact on a mortgage. You will be taking a joint mortgage and both will be 100% responsible for paying it, regardless of the ownership option.

getmore4less

You need to consdier all exit senarioes.

death want to leave, can't pay won't pay etc.

There are two basic ways to do the what do I own bit(or a combinations).

1. equity, you each buy a share of the house with cash and/or with debt that you service.

2. Loan. you lend each other 1/2 your deposit and then share the debts for the rest.


There are quite a few threads that cover this in more detail.

read a few where they failed to put a decent agreement in place before starting.


The get your cash deposit back is option 2.

option 1 is the preferable route as it works equaly for price rises and drops.