Can DH and I both own a property eventhough the mortgage is only in DH's name???

LadyMuck

Hello, as the title says really.

Im a stay at home mums so dont earn apart from Child Benefit. We are in the process of buying a house. DH has submitted his mortgage application as the sole applicant. We were advised by a broker that as DH earns more than 3 x what we are looking to lend and because i dont have an income that there was no need for me to be on the mortgage application. I have used the same broker in the past and he was recommended to me so i do trust him.

Technically we are FTB as we dont have a property to sell but i have owned my own homes in the past and had my own mortgages

We thought we could both be on the property deeds as the owners as long as mortgage lender knew i would have an interest in the property. My solicitor has just advised us that i cant own the house if im not on the mortgage, is this right??

What are our options??

Incisor

LadyMuck wrote: »

... Technically we are FTB as we dont have a property to sell but i have owned my own homes in the past and had my own mortgages

We thought we could both be on the property deeds as the owners as long as mortgage lender knew i would have an interest in the property. My solicitor has just advised us that i cant own the house if im not on the mortgage, is this right??

If the solicitor was speaking on behalf of the lender [which he can do], then there is not a lot you can do about it. Is there any reason why you do not want to go on the mortgage?

Also, the mortgage is primarily against the house as the redemption of last resort. Normally you would own the place as joint tenants [there are no defined shares, you both equally own all of it and you can only sell any part of the house if both agree]. In this case, both joint tenants have to acknowledge that the lender could repossess, which is why both names should be on the mortgage. If you are tenants in common, [there are defined percentage shares and everyone can sell their share independently of the others] then the mortgage could possibly be in the name of one co-owner against that person's share, but the lender would still want some acknowledgment of the situation from both co-owners I suspect.

LadyMuck

The only reason we didnt submit a joint application is because i dont earn we didnt think it would make a difference.

DH has been offered the HSBC lifetime tracker at 5.99% with no fee's etc. Will it just be a case of asking to change this application from sole to joint. HSBC already have DH's signed application doc's. They are no longer offering this deal and we dont want to lose it. We both bank with HSBC so they didnt require any ID etc just DH's last few payslips.

Incisor

Changing it to joint should be a formality if you contact the lender, but these days, even quite intelligent bank employees are not given the freedom to act sensibly, so who knows. But your solicitor may be able to put it right - don't ask him to do this having told him that the bank said no - he probably won't, you get my drift. But if you say to him, "OK, how do we fix this?" he might just do it behind the bank's back.

Richard_Webster

First thing is that the broker really should know better. The vast majority of lenders insist that the ownership of the property and the mortgage have to be in the same names. There will be quite a lot of couples where the wife doesnb't work, but that doesn;t stop the motrtgage and the purchase both being in joint names. This is basic noddy stuff for brokers so if there are extra costs as a result the broker should pay because he had led you up the garden...

I had a case recently where a couple were wanting to buy a place with a BTL mortgage. The broker knew that they were married and should have known that such a couple would want to at least some of the rental income against the wife's tax allowances, not to mention eventual Capital Gains Tax liability on a sale having the advantage of two sets of allowances. For soem reason he submitted th application just in the husband's name. Husband innocently assumed (as so many do inlcuding OP) that the proeprty oculd still be jointly owned. When I discovered this was happening I told the husband that there should be joint mortgage and he got onto his broker. However in the meantime the lender stopped offering the favourable interest rate and would not amend their offer into joint names. The lender was (strangely) prepared to consider a transfer of equity follwoign completion of the purchase. This would cost more in legal fees etc and I have suggested to my client that the broker pays for it, for not explaining things properly.

Having said all that in OP's case there may be light at the end of the tunnel. I think, but may be wrong, that HSBC is one of the few exceptions where they will lend to one person with the property being owned by two people. Both have to sign the mortgage deed to give the security but the loan is only to one, so if the lender repossesses (and kicks both of them out) it can only recover the shortfall from one of them. However, it will probably be simpler to have a joint mortgage.

movilogo

My house is co-owned by me & my wife although mortgage is only in my name. Lender is HSBC though.

Both have to sign the mortgage deed to give the security but the loan is only to one, so if the lender repossesses (and kicks both of them out) it can only recover the shortfall from one of them.

Yes, that's an advantage. But for this same reason, most other lenders are reluctant to allow this