First time buyer here and we're closing on a house over the next few weeks or so. My partner and I are contributing significantly different amounts to the cash deposit and therefore feel a tenancy in common and co-ownership agreement is necessary and we were advised so by our solicitor.
Solicitor suggested we simply split the ownership of the property 60/40 in my favour to account for the additional money I'm contributing. This makes sense.
But I read elsewhere that it may be a better idea to split ownership 50/50 as well as having a formula for calculating the devision of any future proceeds if the house was to be sold. The formula would outline our share in proportion to our individual contributions. When I worked this out with a scenario where we were to sell the house in 4 years time (with a modest increase in property price) I would come out with a larger share of the proceeds than 60/40. But obviously the longer into the term of the mortgage we go the more it evens out, which is fair. So it seems this option is a fair representation of our individual contributions although my solicitor said most clients decide to simply divide the ownership 60/40 (in our situation) from the start and leave it at that.
Am I missing something? Are there pros and cons for both options?
Solicitor suggested we simply split the ownership of the property 60/40 in my favour to account for the additional money I'm contributing. This makes sense.
But I read elsewhere that it may be a better idea to split ownership 50/50 as well as having a formula for calculating the devision of any future proceeds if the house was to be sold. The formula would outline our share in proportion to our individual contributions. When I worked this out with a scenario where we were to sell the house in 4 years time (with a modest increase in property price) I would come out with a larger share of the proceeds than 60/40. But obviously the longer into the term of the mortgage we go the more it evens out, which is fair. So it seems this option is a fair representation of our individual contributions although my solicitor said most clients decide to simply divide the ownership 60/40 (in our situation) from the start and leave it at that.
Am I missing something? Are there pros and cons for both options?