Tenants in common calculation help

mpr87

Hi All,



Currently going through all our paperwork ready to send to the solicitor.



Me and my girlfriend are looking to purchase as Tenants in common.



The purchase price is £166500, Our total deposit is £41375,



I'm paying £15000 with my girlfriend paying £26375


we will be splitting all bills/mortgage payments equally



I haven't got a clue how to split this percentage wise, ideally we would each get our deposit back with the remainder split 50/50 but there isn't an option for this on the form. it is just asking for share percentages



can anyone offer any guidance here?

G_M

What form are you using? You can put anything your want in a Deed.

mpr87

the form seems like more of a questionaire from the solicitor that we are completing

G_M

then write whatever you want - no need to restrict yourself to the precise Qs asked if they don't meet your needs.

He works for you. He'll draft a Deed based on what you tell him.

But if unsure, why not go in and discuss face-to-face so you get it drafted the way you want it, based on his advice and answers to any Qs you have.

GoingOn30

Your girlfriend might want to split the remainder differently since the deposit is not being supplied 50/50.
As she is putting in more you are likely benefiting from a better LTV mortgage and also she might argue she should benefit more from any potential rise in property value going forward.
Me and my other half purchased as tenants in common and it matters more what details you write in your deed of trust than what you put on this solicitors form.
You both need to seek independent legal advice regarding what you agree in your deed of trust.

Tom99

[FONT=Verdana, sans-serif]Your girlfriend is buying more of the property than you (£26,375-£15,000)/£166,500=6.8%[/FONT]
[FONT=Verdana, sans-serif]You will own the property as T in C and your Deed of Trust could say something like this:[/FONT]
[FONT=Verdana, sans-serif][/FONT]
[FONT=Verdana, sans-serif]'On the sale of the property and after paying the sale costs and redeeming the mortgage the proceeds of sale shall be split as follows:[/FONT]
[FONT=Verdana, sans-serif]Party A – 6.8% of the gross sale price less costs of sale[/FONT]
[FONT=Verdana, sans-serif]The remainder – Split 50%/50% between Party A and B'[/FONT]

getmore4less

Another option for is to own 50:50 and she lends you the £5,687.50 to make the deposits equal, you pay her back separately.

Don't forget you need to add in all the costs of buying to the starting total not just the house value.

mpr87

thanks for the tips, Yeah everything else is being split 50/50, so mortgage costs/solicitor fee's and survey etc are all 50/50 she just happens to have much more savings than me, Originally we were going to put the same deposit in but in order to get our LTV ratio down to 75% to help get a better mortgage rate she offered to put more in.

Tom99

mpr87 wrote: »

thanks for the tips, Yeah everything else is being split 50/50, so mortgage costs/solicitor fee's and survey etc are all 50/50 she just happens to have much more savings than me, Originally we were going to put the same deposit in but in order to get our LTV ratio down to 75% to help get a better mortgage rate she offered to put more in.

The calculation of your initial 'deposits' needs to be based on the total price paid incl all fees stamp duty etc not just on the actual house price.

SmashedAvacado

Tom - they don't if they are paying them 50.50. It wont make a difference

As suggested, you shoudl probably have a trust deed rather than using the space in the TR1 for the declaration. As long as you are clear on what happens - ie you pay 50/50 and you get the increase back - then great. You shoudl also consider what happens if one person moves out or you split up - do you sell? I say this not to be negative but if everythign is rosey, then you will have no issue. you are only likely to look at this document if someone dies or splits up so its best to have worked out what would happen if that was the case

getmore4less

(£26,375-£15,000)/£166,500=6.83%

yes it will.

if the fees are £10k £5k each

(£31,375-£20,000)/£176,500=6.44%