Adding husband to the mortage

[avantra]

A question came to my mind the other day.

If something happen to the mortgage owner, what rights his/her spouse and children got? (married couple)


Currently the mortgage and deeds are in my spouse's name, we paid the deposit on the house from our savings pretty much 50:50.

For reasons of income (I was self employed and my wife's on PAYE) we took the mortgage and deeds in her name.

Now, I do remember signing some sort of no claim to the house form during the application procedure with HSBC. My name is somewhere on the documents but I am not named on the mortgage itself.

We now have a two years old daughter and was wondering what rights do we have if something will happen to my wife?

So sages of knowledge here..
Before calling the mortgage company and the legal eagles I am trying to understand where we stand and have as much ammunition before they all start to push their little greasy paws in our pockets.

[Crashandburn]

If something did happen to your partner, does she have enough life cover to pay the mortgage off? Does she have a Will in place stating what will happen to the property?

Their 'greasy little paws' only relate to what you owe them. The rest is passed on as per the will/next of kin.

If you and your daughter want to stay there, best to review your protection/will arrangements.

[kingstreet]

Why did you buy in her sole name? Being self-employed doesn't mean you shouldn't be party to the mortgage and ownership. It may mean your income wasn't taken into account, but nothing else.

What is your concern? Death? Divorce? What do you actually want to achieve?

[Goldiegirl]

As long as you don't have CCJ's / defaults etc, it would be a reasonably straightforward process to add you on to the mortgage and deeds - you'd need to apply to your lender for a 'Transfer of Mortgaged Property'.

The fee to the Lender varies, and you'd need to pay solicitors fees, but you'd end up on the mortgage and be joint owner of the property.

[avantra]

Originally Posted by kingstreet

Why did you buy in her sole name? Being self-employed doesn't mean you shouldn't be party to the mortgage and ownership. It may mean your income wasn't taken into account, but nothing else.

What is your concern? Death? Divorce? What do you actually want to achieve?

It's all about security if something happen, so I suppose future death can be the reason knock on wood.

We don't have a huge mortgage as we took it fairly late in our life (we both in our 40's). We don't pay for life cover as the insurance quotes are extortionate, basically my wife survived leukemia when she was 13 (over 30 years ago) so the insurers we talked to when we took the mortgage (FD,specialist Bright Grey and Axa) ended up quoting more than we could have afford, so for now we go without cover.

We don't have a will (yet, as we are lazy) but do think about getting one done now with the little ones growing.

On my salary alone I can afford the payments even on P/T job so it is really just in case of worst case scenario if my wife dies and I can't work.

If we have a will and my wife leave everything to me and the kids does it mean we still keep a roof over our heads (i.e the bank don't take house) as long as we keep on paying the loan? ( I should know better as been on this forum for almost 10 years and never gave this a second thought).

At the time when we took the mortgage (2010) the bank was not happy to lend at a reasonable rate if my fluctuating income at the time was taken into account so for the sake of a good % rate we decided to go only with one name. I am on PAYE now and been so for the last 3 years.

[Dave Ham]

Speak to the lender and get added to the mortgage, depending upon lender this is a straightforward process.

Then get a will and everything is protected and safe.

Stay as you are and if the worst happens, the bank would simply not let you take over the payments.

Not a huge amount of work to be done, to protect you both and your family and should really be a priority for you.

All the best

[avantra]

Ok, we will speak to FD, our lender. Do you know if they usually charge a fee for doing this?

[Crashandburn]

Not too sure if FD will charge a fee but there will be legal fees to add you onto the property. Might be able to get that done for circa £200 + vat.

[kingstreet]

Right.

You can ask the lender to add you to the mortgage and the ownership in a process called a transfer of equity. You would be vetted like any new applicant and once agreed, the matter is then passed to a solicitor for the legal work to be completed. The total cost is normally between £400 and £600.

If your mortgage deal has ended, you could combine this with a request for a new offer from your existing lender (customer retention product) or you could look to remortgage to a new lender with a new joint mortgage replacing the old sole one. Many lenders offer free legal work with their remortgage deals, although you'd still pay for the extra work involved in the TofE.

There may be stamp duty implications from a TofE.

http://www.hmrc.gov.uk/sdlt/calculat...-ownership.htm

After the TofE, if either of you die, the property and mortgage continues in the sole name of the survivor.

As things stand, if your wife dies, the property will pass into her estate as an asset. The mortgage will become a liability of the estate.

A will or intestacy may leave the assets to you if married, but you would be responsible for repaying the mortgage. This would not automatically pass into your name. If intestate, there is a limit on what you inherit if you have children.

[avantra]

Originally Posted by kingstreet

Right.

You can ask the lender to add you to the mortgage and the ownership in a process called a transfer of equity. You would be vetted like any new applicant and once agreed, the matter is then passed to a solicitor for the legal work to be completed. The total cost is normally between £400 and £600.

If your mortgage deal has ended, you could combine this with a request for a new offer from your existing lender (customer retention product) or you could look to remortgage to a new lender with a new joint mortgage replacing the old sole one. Many lenders offer free legal work with their remortgage deals, although you'd still pay for the extra work involved in the TofE.

There may be stamp duty implications from a TofE.

http://www.hmrc.gov.uk/sdlt/calculat...-ownership.htm

After the TofE, if either of you die, the property and mortgage continues in the sole name of the survivor.

As things stand, if your wife dies, the property will pass into her estate as an asset. The mortgage will become a liability of the estate.

A will or intestacy may leave the assets to you if married, but you would be responsible for repaying the mortgage. This would not automatically pass into your name. If intestate, there is a limit on what you inherit if you have children.

Thank you Kingstreet, can I ask another question?

I don't really want to be on the mortgage if it can save us the lawyer fees, all I want to know is that if my wife leave me and the children the house in her will, would the bank respect this and simply allow us to continue the mortgage payment and change the ownership? This is sound so morbid but just want to make sure that if something happen we still own the house.

[kingstreet]

No. They wouldn't.

The property is an asset of the estate and the mortgage a liability.

Ensure your wife wills the property to you and get her to take out a life policy, either joint with you, or in trust for your benefit to give you the funds you would need to repay the mortgage.