Importantly, a properly structured TIC loan on a second home will allow a future buyer to step into the mortgage position of the existing second home owner.  Savvilla strongly advises working with a mortage broker who specializes in TIC loans.  Please ask us for a referral. 

Savvilla second homes always include a Default Reserve Fund equal to 6 months of operating costs. If your co-owner defaults, the Default Reserve Fund will cover their payments while the operating agreement’s default scenario provisions bring the default event to a resolution. 

TIC Financing Doesn’t Work For Buyers On Unequal Terms

Because a home lender needs to be in first position on a loan, it is virtually impossible for two buyer to take two different mortgages on the same home.  In theory, a whole home owner with no liens on their second home could sell a 50% interest (and retain the other 50%) and then allow the new 50% owner to mortgage their new 50% interest.  But in practice, this doesn’t happen because if the new owner were to default, the mortage lien on the home would place the lender in a position to repossess the entire home. 

Accordingly, Savvilla pairs cash buyers with cash buyers, and financed buyers with financed buyers.