Bristol and West First Start / Title Deeds??

takeag

Hi!

I think I may have made a mistake when originally signing up for the first start mortgage offered from Bristol and West. The joint party being my Mother.

I am now in a position to start overpaying on the mortgage, whilst waiting for a good fixed rate to come my way.

My house purchase was on the 30th March 2007, and my fixed rate came to an end at the end of November 2008, I am now on there SVR.

Being naïve at the time of taking the mortgage, I am now unsure whether it was correct to add my Mum on the deeds of the house.

I have been researching heavily prior to commencing overpayments, but have been stumped by the mention of Capital Gains tax that my Mum may be implicated to? This is even though I have made every payment and will be making every overpayment.

My mum has played no part whatsoever of any mortgage payments and was only used to enable me to get the amount required to purchase the property.

I understand now that it was my option to decide what went on the deeds, but I now believe I have misunderstood having my Mum on the deeds and what implications this could cause later on.

I am happy to leave things as they are, if there are no issues, but with the mention of Capital Gains, Inheritance tax, I'm apprehensive about the overpaying I am planning, release of equity etc.....

I would still like to keep her on the mortgage side of things until I reach the required lending level required for my single wage, until overpaying gets me in the region of taken the mortgage under my name.

I've read similar archived threads on the site, but they all seem to relate to Guarantor true joint party mortgages, nothing from first start type mortgages.

Any help greatly appreciated, thanks.

Rednoseranter

My thoughts would be that as this property isn't your mums main residence - she may be liable for capital gains tax on the profit you make when you sell the property, if your not thinking of selling then it isn't an issue. I don't really know enough about CGT to know whether by removing her from the mortgage deeds now you negate any CGT she may be liable for - speak to an IFA / Tax Specialist.

I don't think its got anything to do with your mortgage - and whether you make overpayments on it, I reckon its got everything to do with the profit your mum might make as joint 'owner' of your home.

noxon

I had a First Start mortgage from 2004 to 2007. It was a condition of the mortgage that my mum took independent legal advice from her own solicitor before we were able to complete, did you not have to do this and do you not have a record of what she was advised about tax implications?

As it happens, the main attraction for us of First Start compared to a guarantor or joint mortgage was the fact that I could have my sole name on the deeds as I knew I would want to remortgage on my own as quickly as possible after the discount period, which I did.

I think Rednoseranter is right and it isn't until you come to sell or to remortgage into your own name, or if anything were to happen to your mum, that you have to worry. But if you don't have any documentation stating the tax implications for her clearly then getting professional advice now might put your mind at ease.

Trying_to_be_good

Do the title deeds specify the propoertion of the property that your Mum owes?

Now could be an opportune time for your Mum to 'sell' you her share (if she didn't put any money into the original deposit, nor pay any of the mortgage I would think this could be at nil sale proceeds), or even for her to pay you her 'share' of the drop in the property value, potentially taking money out of her estate for Inheritance Tax purposes and crystallising (making) a Capital Gains Tax loss rather than a profit.

There will be legal fees for the transfer of (negative) equity, but it could work to both your advantage.