Declaration of trust information

jonboy83

Hi.

Today i was turned down by HSBC for a joint mortgage with my GF. she is a long term customer and has perfect credit report/score. i have a very bad one which involves several missed payments over the last 12-18 months specifically with HSBC products...CC.

the good news is that my GF has been accepted for the mortgage in her own name. however, 40% of the deposit and associated costs (legal, stamp, es agents) are coming from me as i was meant to be owning 40% of the property. My GF's solicitor has informed her that she can progress with the purchase and protect herself from me not paying (should we split up) by signing a declaration of trust. it also means that only her name is on the deeds.

As i understand it there are two ways it can be setup.
1. to cover the deposit percentages when he house is sold on. ie, split the original contributions 60/40 and then the new equity (if there is any of course) 60/40.
2. the more complicated route is as above plus the inclusion of my monthly mortgage payments - somehow legally binding me to my GF to make the payments if we split up so she is protected?

so, questions...
1. is this quite common or is it complicated to setup?
2. how much should i budget for a solicitor to draw up these papers?
3. how long do they take to draw up?
4. do i legally own 40% of the house?
5. what happens if she runs off with another bloke - does this trust agreement stay in place until she decides to move on?

is there anything else i need to made aware of? i want to keep this simple but cover my self for the basics. ie, when the house is sold on i get back what i put it!

thanks
J:(

Fire_Fox

These are queries you ought to be raising with your solicitor as you MUST understand the implications of what you are signing: people on a forum can give you a b*m steer!! You would not own any part of the house as your name is not on the deeds, you will be a second charge (like a secured loan) to be paid when the house is sold providing there is sufficient equity after the lender, solicitor AND estate agent have been paid. You money is tied up until you both agree to sell or she agrees to pay you off. There is no way to guarantee you get back what you have put in, house prices can go down as well as up so 'investing' in property in a recession is a gamble.

timmyt

jonboy83 wrote: »

Hi.

Today i was turned down by HSBC for a joint mortgage with my GF. she is a long term customer and has perfect credit report/score. i have a very bad one which involves several missed payments over the last 12-18 months specifically with HSBC products...CC.

the good news is that my GF has been accepted for the mortgage in her own name. however, 40% of the deposit and associated costs (legal, stamp, es agents) are coming from me as i was meant to be owning 40% of the property. My GF's solicitor has informed her that she can progress with the purchase and protect herself from me not paying (should we split up) by signing a declaration of trust. it also means that only her name is on the deeds. true, but the lawyer will need to report that all the purchase funds are not coming from your g/f resources

As i understand it there are two ways it can be setup.
1. to cover the deposit percentages when he house is sold on. ie, split the original contributions 60/40 and then the new equity (if there is any of course) 60/40.
2. the more complicated route is as above plus the inclusion of my monthly mortgage payments - somehow legally binding me to my GF to make the payments if we split up so she is protected?

there are not 2 ways. the lawyer simply records what you want to happen both during the ownership (i.e mortgage responsibuility) and what happens on a sale)

so, questions...
1. is this quite common very or is it complicated no, its a document to draft to setup?
2. how much should i budget for a solicitor to draw up these papers £200-£250?
3. how long do they take to draw up as part of the conveyancing ?
4. do i legally own 40% of the house you own share of the proceeds of sale, there is a difference?
5. what happens if she runs off with another bloke - does this trust agreement stay in place until she decides to move on if your lawyer properly protects your stake with the correct Land Registry entry?

is there anything else i need to made aware of? i want to keep this simple but cover my self for the basics. ie, when the house is sold on i get back what i put it!

thanks
J:(

see in red above, good luck