Implications Joint vs Sole mortgage

adamjth

Hi,

I am,in the process of re-mortaging my house to a new lender and I have always previously paid the mortgate as a single applicant despite being married. The reason for this is that my wife had some credit issues with HSBC over 5 yrs ago and it seemed simpler to just doing the mortgage in my name. BTW I am aware that if we split up that we would divide all possessions 50%

Anyway my father has pointed out that there may be a good reason to do a joint mortgage with respect to what might happen if either of us passed away. Can anyone clarify this point (or point me to an online resource) I thought that I had this covered by taking a level term life assurance policy that paid the mortgage off for the remaining partner in the event of either of our deaths. Any advice info welcomed

thanks

Adam

cabbage

Hi
This is the situation with the Deeds and buying or remortgaging in joint names. There are two ways to hold a property jointly, as joint tenants and tenants in common.

Your obligations towards the lender remains the same in either case. Either way, both parties are jointly and severally responsible for the mortgage payments ie if one of you decides not to pay the mortgage the other is responsible not just for their share but for the whole mortgage payment. If the house is repossessed both remain responsible for any shortfall.

with joint tenants on the death of one their share automatically passes to the other joint tenant. With tenants in common the person's share of the property can be "willed" to anyone and it does not automatically go to the other tenant in common.

As far as splitting up and who owns what share, it makes no difference really. Most separating couples are usually advised to change to tenants in common by their solicitors I think because they wouldn't want their ex inheriting their share if they should die. As you get older, transferring to tenants in common may mean that for care home fees etc you only own half a share and who would want to buy that share to realease the equity. I would, however, strongly suggest getting legal advice if you wanted to do this as I do not know all the ins and outs of this situation.

You are right that if you have a mortgage in your sole name it doesn't stop your OH claiming a share in the property.

opinions4u

Well written wills and life assurance policies in trust can more or less deliver the intended outcome.

Talk to solicitor for the wills and an IFA for the term assurance.

getmore4less

adamjth wrote: »

Anyway my father has pointed out that there may be a good reason to do a joint mortgage with respect to what might happen if either of us passed away.

You need to ask him what he thinks the reasons are, there are pros and cons with whatever you do.

adamjth

getmore4less wrote: »

You need to ask him what he thinks the reasons are, there are pros and cons with whatever you do.

He was under the impression if you have a joint mortgage and one person in the agreement dies then the morgage would be completly paid off for the remaining partner. I can't believe this to be the case and thought that was what you paid life assurance for (i.e level term) but he counters that he was advised by a solicitor to switch from sole to joint

opinions4u

A joint mortgage would pass, in full, to the survivor. The debt remains. Dad has misunderstood.

A single name mortgage would pass to the estate of the deceased. Selling the house to clear the debt is a potential outcome that the executors would have to consider.

Life assurance is almost certainly essential in either case. And, as I posted earlier, a well written will each.

adamjth

opinions4u wrote: »

A joint mortgage would pass, in full, to the survivor. The debt remains. Dad has misunderstood.

A single name mortgage would pass to the estate of the deceased. Selling the house to clear the debt is a potential outcome that the executors would have to consider.

Life assurance is almost certainly essential in either case. And, as I posted earlier, a well written will each.

Thanks for the clarification. As it happens I am just in the process of writing the will through the Which Magazine website so I will consider this