Tenants in common

orangeyred

My girlfriend and I are looking to buying our first property together. I will be putting forward the entire deposit amount and then both of us will be paying the mortgage payments together. If we do decide to split up and sell the house, is it possible for a tenants in common agreement to cover the cost of the deposit and then halve the remainder (i.e. mortgage amount)?

anselld

Yes. You will need a Deed of Trust to specify the details. The solicitor should be able to draw this up for you.

booksurr

decide if you want an agreement whereby your deposit represents additional equity in the property and so you own x% of the property in total and therefore get back whatever that represents when you split and sell, it may be more or less than the original deposit in cash terms

or

do a deed of trust to secure the deposit as a first call on the sale proceeds with the remaining proceeds then being split in whatever % your TIC agreement gives you.

of course in either case think very carefully if you have a high LTV and therefore the equity (your deposit) may be at risk since obviously the mortgage must be repaid before any equity can be split. Another reason to have a deed of trust which sets out how any negative equity is to be split

Richard_Webster

2 Points:

Careful you know what your agreement really means. E.G. you put in 20% cash and you share paying instalments on 80% mortgage with partner. You .split up after 3 months payments. Is she entitled to 40% having only paid half of three mortgage payments?

Also agreements are expensive to enforce. The cost of court proceedings often means that you end up agreeing a compromise that is not what was in the agreement.

orangeyred

Richard_Webster wrote: »

2 Points:

Careful you know what your agreement really means. E.G. you put in 20% cash and you share paying instalments on 80% mortgage with partner. You .split up after 3 months payments. Is she entitled to 40% having only paid half of three mortgage payments?

Also agreements are expensive to enforce. The cost of court proceedings often means that you end up agreeing a compromise that is not what was in the agreement.

This is what I was worried about with my question. Splitting as a percentage of the property value would mean getting less of my original deposit back if we split before the flat is paid off.

The Deed of Trust sounds exactly like what I was looking for. Thank you to anselld and booksurr. I will ask my solicitor and hopefully they can do this for me.

Guest101

orangeyred wrote: »

This is what I was worried about with my question. Splitting as a percentage of the property value would mean getting less of my original deposit back if we split before the flat is paid off.

The Deed of Trust sounds exactly like what I was looking for. Thank you to anselld and booksurr. I will ask my solicitor and hopefully they can do this for me.

Only if the property loses value. if it gains value you get more