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Declaration of trust

My partner and I are first time buyers and we recently tried to apply for a mortgage together but we were declined. Therefore I am looking at getting a mortgage on my own. We will need to draw up a Declaration of Trust to protect the money that he will put into the property as once we've moved in everything will be split equally. Does anybody have any experience of this and how much are we looking at for an agreement to be drawn up?

Comments

  • david29dpo
    david29dpo Posts: 3,750 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    You will find most if not all lenders will need a joint application but using just your salary if you are both living in the same property. Buy under tenants in common if not married. This means any % split is possible with a deed written up (£100 ish)
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Do you know why you were declined? might it be better to sort that issue out and hold off buying a place?
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • xxd25xx wrote: »
    ... I dread to think how much money we've thrown away over the past few years!
    Possibly less than if you had bought in 2007
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • Kyrae
    Kyrae Posts: 541 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Myself and my partner are also getting a declaration of trust drawn up, as at present I am unemployed so we can only get a mortgage in his name. Though I am paying half the deposit, and half the mortgage payments etc out of my savings so need the protection of a declaration of trust. The mortgage offer states that the mortgage is just in his name but that I will also be living in the property, so that doesn't seem to be a problem. The declaration will just state that the property can't be sold by one person without the other's permission, and that should the house be sold then after the mortgage is paid off any money will be equally split between myself and my partner. Definitely the sensible thing to do :)
  • Kyrae
    Kyrae Posts: 541 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Yea we had exactly the same problem! Put through in joint names we could borrow about £30k less than my partner borrowing alone, as apparently i'm classed as a dependent if im not earning... which is a little frustrating as i have enough in savings to pay my half of the mortgage until a job comes along.
    Doesn't make sense to me, I don't see what the bank have to lose by letting one extra name be on the mortgage, would love to hear an explanation if anyone has one. Not sure what its costing yet sorry, should be seeing the solicitor in the next week or 2 to speak to her about our requirements and get a price! :) Hopefully nearer the £50 than the £500 though!!
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    xxd25xx wrote: »
    My partner was declined because he has had adverse credit in the past. He has set up a payment plan and is paying off all of his debts but because his defaults are fairly recent he was declined on this basis. It's frustrating but I don't want to rent forever. I dread to think how much money we've thrown away over the past few years!

    You are suggesting your partner has a lump sum to put down on the house, why is he not using this to pay his debts? :confused: He will have wasted a lot more money on interest payments and default charges for debts than he has saved. If you'd bought a property year or two ago you would probably be in negative equity so you haven't thrown money away renting. It's madness to buy a property when you have debt, do not underestimate the costs of running your own home compared with renting. Please please read through the Debt-free Wannabe board and get one debt sorted before you take on another.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    xxd25xx wrote: »
    He doesn't have a deposit... it will be coming from me and my parents (hence another reason for the declaration). And yes you're probably right but he has met with citizens advice and is doing everything he can to pay them off as quickly as possible. But, it could take him a few more years to pay them off and I don't want to sit around waiting as I'm debt free and time is ticking. The mortgage repayments that we've been looking at are cheaper than our rent and we have budgeted and read every money saving / debt free book there is! Anyway, there seem to be a few houses around in our very limited budget so I suspect we won't be moving anytime soon.

    You said in your OP that the declaration of trust was to protect the money HE was putting into the property, hence my confusion. Frankly YOU are stumping up the deposit and YOU are taking the risk if the two of you cannot meet the mortgage (accidental pregnancy/ redundancy/ long term sickness) or split up, YOU are going to have to pay for any repairs as he is in debt .... :confused:

    This is going to be your house, with your partner effectively lodging from you. Let him come in on the deeds and mortgage once he has got himself out of debt and saved up his own deposit. Alternatively if you want to be equal in this and both get the benefit then help him pay his debts, it works out the same - either way you are giving away money.

    If you want to start a family together the most important thing is not who owns 5% of an asset that you can't liquidise as you live in it, but that the baby's father has a stable income, no debts and a good credit rating. The credit rating won't start building up again until six years after the last debt is paid off!!
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • Do not enter into a mortgage with this person. He can rent from you but you and only you are on the mortgage.

    This is no time to be all nice and lovey dovey. I did that and it cost me more than I care to recount.

    You will come under pressure but just think about it as if you bought the property before he came into your life. If he argues too much, chuck him.
  • zzzLazyDaisy
    zzzLazyDaisy Posts: 12,497 Forumite
    Part of the Furniture Combo Breaker
    This man is not in a position to buy a house. That is why the lender has declined him, and why you should too. Once he has sorted out his debts and is able to make a proper contribution to the cost and upkeep of the house, then you can put his name on the deeds and the mortgage.

    There is no reason why you can't buy the house in your name and let him live there. You will be giving him a roof over his head, which means that he can focus on getting his debts paid off. He can contribute towards bills and food, just not the mortgage - keep that entirely separate.

    Anything else is just madness - if he goes down, he will take you down too.
    I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.
  • VKay
    VKay Posts: 262 Forumite
    A declaration of trust recently cost me £175.

    However i think Lazy Daisy is right- it will be something really positive for him to aim for. When he is debt free you can put him on the mortgage. But for now really it would be better for you both if it was in your name only.
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