First Time Buyers - Tenants in Common - Equal shares?

FTByuer22

Hello,

Me and my partner are going through the process of buying our first home together. 

He is putting 35k towards the deposit and I am putting 15k.

We have decided the mortgage and expenses will be paid in proportion to our wages. (Him 60% Myself 40%)

We have agreed to go down as tenants in common as we are not married and do not have any children together yet. Should the ownership of the property be split 60:40 or 50:50? 

We are not sure the best way to go about this. If anything was to happen we would want each to get their deposit back, however not certain on how the ownership is best split.

Thanks in advance

DullGreyGuy

Ultimately your choices

You appear to be considering the fairness in the event of a break up (though what seems fair at that point may be different to what you think now). If he is contributing more than you wouldnt it be fairer to split the property on the same basis... obviously this then gets complex if circumstances change and you start being the bigger earner/contributor 

TBagpuss

Up to yu. You could have a declaration of trust that says you each get your deposit back and that the balnce is split 50/50 - soundsas though you are each contriuting equally in terms of the proportion of your income.

There's no single right answer, so chosing to do it 60/40 wouldalso be fine, but you'd need to decide whether you were going to then update the deed evey time either of you has a change in circumstnacces or f the proportions you each earns changes.   Fixing a % that each of you gets back based on your deposit then splittingequally reflects that you are both contributing equal proportions of your income awhile meaning you get your deposits back so it may be a comfortable compromise that keeps things fairly simple. 

SprostonGreenHead

TBagpuss said:

Up to yu. You could have a declaration of trust that says you each get your deposit back and that the balnce is split 50/50 - soundsas though you are each contriuting equally in terms of the proportion of your income.

There's no single right answer, so chosing to do it 60/40 wouldalso be fine, but you'd need to decide whether you were going to then update the deed evey time either of you has a change in circumstnacces or f the proportions you each earns changes.   Fixing a % that each of you gets back based on your deposit then splittingequally reflects that you are both contributing equal proportions of your income awhile meaning you get your deposits back so it may be a comfortable compromise that keeps things fairly simple. 

This is similar to what I'm doing with my partner, although different circumstances. We are unmarried but have two small children. I'm contributing 75% of the deposit to her 25% (both of which we earned before kids came along). Payments would be all down to me, although my partner will be taking care of the kids day to day, so we agreed to split any equity gained / paid off whilst residing there but that we should each get back our deposit first before that is distributed. We're going to hold as Joint Tenants but with a Cohabitation agreement. Really the agreement is just there as evidence to state our intentions as due to kids being involved, a court could overrule that if it comes to it. In the event the equity doesn't cover both deposits, the intention is to distribute what there is along the lines of 75:25%. We also came up with a buyout clause to reflect our initial deposits.

This seemed like the fairest way to do it to us but there's many ways!

1616six

It’s all down to preference.

We are an unmarried couple 30 & 28 with no intention of marriage, been together 11 years no kids, (don’t want them either!) and have gone joint tenants.

The 35k deposit was virtually all early inheritance from my partners side so it’s only fair for us to have a declaration of trust to ensure that deposit is retained should the worst happen and the rest is straight 50/50 as we earn similar and have always split bills fairly equally. 

There’s no wrong or right way to do it. I can’t remember the exact reason but something made us easily decide joint tenants was a better choice than tenants in common but that could of course be the polar opposite for someone else.

SprostonGreenHead

1616six said:

It’s all down to preference.

We are an unmarried couple 30 & 28 with no intention of marriage, been together 11 years no kids, (don’t want them either!) and have gone joint tenants.

The 35k deposit was virtually all early inheritance from my partners side so it’s only fair for us to have a declaration of trust to ensure that deposit is retained should the worst happen and the rest is straight 50/50 as we earn similar and have always split bills fairly equally. 

There’s no wrong or right way to do it. I can’t remember the exact reason but something made us easily decide joint tenants was a better choice than tenants in common but that could of course be the polar opposite for someone else.

I'm slightly frustrated to learn you were able to do it like this. It was our intentions also to go Joint Tenants and have a DoT. Our solicitor prepared a DoT and then dropped a bomb that if we wanted a DoT we'd have to go Tenants in Common and suggested the cohabitation agreement route. The cohabitation agreement is costing £700 whilst the DoT was only going to be about £200.

1616six

SprostonGreenHead said:

1616six said:

It’s all down to preference.

We are an unmarried couple 30 & 28 with no intention of marriage, been together 11 years no kids, (don’t want them either!) and have gone joint tenants.

The 35k deposit was virtually all early inheritance from my partners side so it’s only fair for us to have a declaration of trust to ensure that deposit is retained should the worst happen and the rest is straight 50/50 as we earn similar and have always split bills fairly equally. 

There’s no wrong or right way to do it. I can’t remember the exact reason but something made us easily decide joint tenants was a better choice than tenants in common but that could of course be the polar opposite for someone else.

I'm slightly frustrated to learn you were able to do it like this. It was our intentions also to go Joint Tenants and have a DoT. Our solicitor prepared a DoT and then dropped a bomb that if we wanted a DoT we'd have to go Tenants in Common and suggested the cohabitation agreement route. The cohabitation agreement is costing £700 whilst the DoT was only going to be about £200.

That sounds very odd, surely the mortgage is your choosing?! Our solicitor never said anything about the type of mortgage we went for.

We haven’t gotten round to sorting the DoT yet but I’ve been made aware from multiple sources that they can be done at any time. To be honest even if we didn’t have one, I’m not the sort of person to screw my partner over regardless, morally the money is hers!

SprostonGreenHead

1616six said:

That sounds very odd, surely the mortgage is your choosing?! Our solicitor never said anything about the type of mortgage we went for.

We haven’t gotten round to sorting the DoT yet but I’ve been made aware from multiple sources that they can be done at any time. To be honest even if we didn’t have one, I’m not the sort of person to screw my partner over regardless, morally the money is hers!

Yea, I feel the same that my partner wouldn't try and screw me over and we could probably have saved some cash and hassle but I guess you never know what the future could hold or how personalities could change. We wanted something in writing so it was solid, although as I say, because we have kids, it could all be overruled by a court anyway.

Honestly starting to think we've wasted £700. Nevermind  

1616six

SprostonGreenHead said:

1616six said:

That sounds very odd, surely the mortgage is your choosing?! Our solicitor never said anything about the type of mortgage we went for.

We haven’t gotten round to sorting the DoT yet but I’ve been made aware from multiple sources that they can be done at any time. To be honest even if we didn’t have one, I’m not the sort of person to screw my partner over regardless, morally the money is hers!

Yea, I feel the same that my partner wouldn't try and screw me over and we could probably have saved some cash and hassle but I guess you never know what the future could hold or how personalities could change. We wanted something in writing so it was solid, although as I say, because we have kids, it could all be overruled by a court anyway.

Honestly starting to think we've wasted £700. Nevermind  

Unfortunately I’m 99% sure you have wasted it I’m afraid! I had a quick look online and it appears you can have a declaration of trust regardless of the type of mortgage, you can have one for various reasons - irrespective of being tenants in common or joint. What a pain!

We have exchanged and are due to complete next week, we hadn’t even thought about a DoT until last week so decided to do it once we compete as not to rock the boat! I think it’s a great idea though, if the shoe was on the other foot I’d want to protect my investment too.

timbotambo

FTByuer22 said:

Hello,

Me and my partner are going through the process of buying our first home together. 

He is putting 35k towards the deposit and I am putting 15k.

We have decided the mortgage and expenses will be paid in proportion to our wages. (Him 60% Myself 40%)

We have agreed to go down as tenants in common as we are not married and do not have any children together yet. Should the ownership of the property be split 60:40 or 50:50? 

We are not sure the best way to go about this. If anything was to happen we would want each to get their deposit back, however not certain on how the ownership is best split.

Thanks in advance

Deed of Trust like others say. But your situation is trickier as the simple way is to treat it as if you both own half the house but fund each of your halves differently - him via a larger deposit and smaller mortgage payment, you via a smaller deposit and a larger mortgage payment. For your situation, where he pays more mortgage payment,  you are best to do a 60:40 split of ownership but with the DoT to state that deposit figures are protected to the amounts put down by the individuals.

getmore4less

The get your deposit back first is the same as an interest free load of 1/2 the difference.

OP case there is a clear 70:30 split of deposit and 60:40 mortgage payment

The equitable split will be between the two depending on the size of the deposit.

Once set it never needs to change if,

maintenance and improvements should also be split in same proportion.

Any mortgage overpaying is at the 60:40 proportion.