Mortgage in sole name rather than joint?

saraht117

Hi,
My husband and I have two young children and are hoping to move to a bigger house this year. I currently stay at home with my children and so my husband is the sole earner in our household. He earns £31500 pa. Unfortunately we bought our current house at the wrong time and so havent gained much in the way of profit on it. We bought for £120,000 5 years ago and although valued at around £130,000 we believe that it is likely to sell for less than the current stamp duty threshold of £125000 due to it being a typical first time buyer terraced property. We aim to buy a property for as little cost as possible and will be hoping for something around the £135,000 mark. In a couple of months time our mortgage balance will be £106,500 so if we sell for £125,000 we will have a deposit of £18,500. We have little in the way of savings and will need to use part of that deposit to pay for the costs of moving (agents fees, solicitors, stamp duty, land registry, valuations etc). Taking all this into consideration we are hoping to get an 89% ltv mortgage on a £135,000 property of £120,150.
My question is that I have done a few of the 'how much can I borrow' calculators online and if we applied on a joint application (with my earnings being nil) then we are unlikely to be able to get a mortgage for our required amount. However if my husband applied as a sole applicant there are quite a few lenders who may be willing to lend us the money. If we went down that route so that my husband was the sole person on the mortgage, is it possible for the title to be held in both our joint names or will the title only be in his name and could this cause problems for us in the future?
I do plan to go back to work in a years time, however it will only be part time to work around my children and my earnings will not be anything substantial, however it will help when the interest rates increase and when our mortgage payments increase.
Thanks for your help.
Sarah

dimbo61

He will be asked if he has dependants and if he lies its mortgage fraud!!
sorry to have to tell you that some lenders take into account CB,wtc,etc

saraht117

Thanks for your reply dimbo61 but im not sure what you mean? He wouldnt lie on the mortgage application. We have 2 children and if im classed as a dependant as well then he will obviously declare us all! We are not looking to commit mortgage fraud!!

Can a mortgage not be taken out in the name of just one spouse? Some lenders loan more if the application is a sole one based on only one salary.

Sorry I dont have much knowledge in this area as you cant tell....

CLAPTON

I'm very surprised that there is any difference between a man with a dependant wife applying for a mortgage and a husband and wife (with no income) applying for a mortgage
maybe better to apply in person and see what they say

chunkychocky

The mortgage calculators are really just a guide. You'd need to go into vast amounts of detail when you actually apply so it would all be considered then. Before they get to the stage of doing credit checks etc then they would look at affordability. They would look at the fact that there is 1 income and 4 people. They would be able to tell you at the time whether or not you are better off applying in sole or joint names, as it may be different dependent upon which company you are applying to.

Thrugelmir

What Dimbo is saying that your husband will declare you and the children on the mortgage application. This will taken into account when calculating affordability.

So you may well struggle to achieve the mortgage you require.

If you can afford the increased mortgage repayments on an increased mortgage. Then overpay your current mortgage for a period of time. This will bring your goal closer.

marlasinger

If it's any consolation, we managed to borrow £95,000 on one income of £25,000. We could have borrowed more; we initially got approved for a mortgage of £112,000 (and that was based on what we thought we needed; we may have been approved for a higher amount if we had been looking for a more expensive property).

cabbage

I don't think you can apply for a mortgage in a sole name and then have two joint owners listed on the title deeds. The solicitor you employ acts for you and your mortgage lender and I've never known this to happen.

Mortgage lenders like having two people on the mortgage because if you don't pay they can come after you both. That's regardless of whose income is being used to calculate how much you can borrow. You will be assessed as a couple.

The only reason I can think of to apply in a sole name (and use sole income) but be a couple is if the other party has a bad credit rating - which I am not suggesting is the case. My sister applied in her sole name for a mortgage as her new husband's previous property had been repossessed. He was not listed as a joint owner or joint mortgagee.

saraht117

Thanks everyone for your advice. We hadnt really been thinking in terms of lenders assessing our affordability based on the fact that there are 4 of us with only 1 income. We know we can afford the increased payments but I guess we are quite a risk to lenders. We may need to have a rethink and in the meantime I think you are right Thugelmir we should look at making overpayments to our current mortgage.

Thanks again.

Thrugelmir

marlasinger wrote: »

If it's any consolation, we managed to borrow £95,000 on one income of £25,000. We could have borrowed more; we initially got approved for a mortgage of £112,000 (and that was based on what we thought we needed; we may have been approved for a higher amount if we had been looking for a more expensive property).

There's nothing clever in overstretching oneself financially. The months will pass and you'll still be repaying the mortgage on the same old property. With bigger debt comes more interest to pay.

Meeper

As has been stated, you cannot hold a property in joint names with only one person on the mortgage.

The reason that you wouldn't benefit from only having your husband on the application is because, as you say, there are 4 people and only 1 wage. The calculation for affordability purposes therefore, would be the same in that scenario as if there was 2 people named on the case and only one of them working. In short, it doesn't help you at all, even if you could do it.