Unmarried Couple Mortgage Advice

fluffybunni

Hello,

We are an unmarried couple who are in the process of buying our first house together.

I’m a bit confused as to whether we need tenancy in common or joint tenancy and if we have a tenancy in common, do we need a declaration of trust and/or co-habitation agreement?

We have saved equally for the deposit and will be paying for the mortgage and bills equally. We are happy for everything to be divided equally should we break up.
We do not have a Will yet, but will be making one of these very soon.

If we have a tenancy in common, do we or should we also have a declaration of trust and/or a co-habitation agreement?
We have requested more information about each of these from our solicitor but I haven’t found the information to be very clear.

Any advice would be much appreciated! J

p00hsticks

As I understand it, the main difference between the two is ...

With tenants in common you each own half the house and on your death each of you can leave your own half to whoever you want to.

When you own a house as joint tenants, you are both sharing the whole house and on the death of one ownership automatically passes to the other.

So you need to think about what you would like to happen the even that you died suddenly.

Owning as tenants in common means that you can leave your share to whoever you want to (including your partner) by making a will, and if you should change your mind in the future you just change your will. If you don't make a will, as you are not married, your partner would not inherit and your share of the house would go to your next of kin (children, parents, siblings) - and it could ultimately mean that your partner is unable to remian in the house.

Owning as joint tenants means that your partner inherits the whole house (although unless you take out life assurance to pay of the mortgage, he might not be able to afford to stay in it).

There's not right or wrong answer, just what you think is best for you. But consider all the possiblities of what would happen if the relationship went wring ,and do get a will in place if you decide on tenants in common.

fluffybunni

Many thanks for your reply!
That seems a lot clearer.


If we go with tenants in common and have a Will, do we also have to get a declaration of trust or co-habitation agreement? The solicitor is asking us to pay £250 extra for these but I'm not sure they are needed by us, if we are happy to divide everything 50:50...?

HappyMJ

fluffybunni wrote: »

Many thanks for your reply!
That seems a lot clearer.


If we go with tenants in common and have a Will, do we also have to get a declaration of trust or co-habitation agreement? The solicitor is asking us to pay £250 extra for these but I'm not sure they are needed by us, if we are happy to divide everything 50:50...?

You don't have to do anything.

You can make your own declaration of trust both sign it and both individually keep copies of that agreement. If you've agreed everything 50/50 then there shouldn't be any problem whatsoever so I'd do it myself and save the £250.

Be aware another persons will can change without your permission. If your partner wants go their separate ways they might change their will at the same time to leave their half of the house to someone else. If they then die you'd have to sell.

fluffybunni

Great, thank-you for all the advice!


Starting to make much more sense now...phew!