Deeds/Mortgage question?

princessmoneysaver

Thank you for all help with this issue

Senior_Paper_Monitor

Any charge (first or second) to be established on the property must be approved by the owners (as indicated on the title register) and the persons obtaining the charge will have to obtain details of the registered owners as part of the process for any such charge to be valid.

An faiilure to do so will inevitably lead to any attempt to enforce any charge assumed to have been established as unsupportabble.

In simple terms no individual can pledge something they don't own.

simpywimpy

Just suppose those 2 people defaulted on the mortgage at any time, wouldn't it mean the other one would lose their share potentially having agreed to the loan?

It might be easier to buy the third person out of the property altogether if possible, leaving the other 2 owners living in it and therefore free to mortgage without risk to the third.

CLAPTON

in general a mortgage company would want all the owners on the mortgage and be jointly and severally responsible for the repayments.

otherwise if the 'two' people defaulted, the mortgage company couldn't sell the property as the third person owned one third making the property unsellable.

Senior_Paper_Monitor

There are ways to use shared ownership (options will vary with the relationship between the parties) - but there are implications and necessary involvements for all three individuals.

Good advice will need a detailed understanding of each party's situation - and frankly you are not going to obtain the detailed answer on here (or on internet forums in general).

Go and see a good experienced whole of market mortgage broker/IFA, give them the full background and they should be able to suggest some possible structures. I would be confident that it will subsequently be necessary for you (all 3) to take legal advice so that everyone understands the implications a s they affect them.

Senior_Paper_Monitor

This is do-able if you (3) have the disposable income necessary, appropriate credit records etc.

You may find a free advisor but not all free advice is the best - neither is paying a fortune for it either unfortunately. Anything between a couple of hundred to perhaps five hundred pound fee would fall in 'the reasonable band' for the work involved for 'babysitting you through this' - in my opinion. If you get a good one - and recommendation is probably the best route - it will be money well spent.

Their are many issues to consider here - including any other siblings who would see their share of an inheritance locked up/risked in the 'new arrangement'. Non of them insurmountable but need addressing.

As to the solicitor - not needed immediately (but probably sensible in the long run to ensure everyone understands their risks) although you may decide the broker/IFA's advice is sufficient (just possible that some party - such as the lender - may insist upon it).

One thing I don't understand is - if you already own it between you, why do you need the mortgage ? Don't bother telling us, tell you adviser (together with a list of other questions they will raise).

Senior_Paper_Monitor

If MIL willing to 'give up' share (may as well if she doesn't need improved asset base - and will avoid any future IHT issues which may or may not be an issue - and will be leaving it to son anyway) that could be a simple transfer of equity and you/son could obtain a mortgage on the unencumbered property (assuming normal affordabiliy/credit issues).

If all three wish to retain interest in property it will be all on the mortgage.

There are more complicated mortgage and trust structures, which may better protect theoretical interests but probably not worth the trouble in this case (and will need an adviser to put in place).