Joint mortgages

ozyris

Hi,

I've made a search and found many topics on joint mortgages but couldn't find an answer to my question. Sorry if it's been discussed before;

Suppose;
Me and my partner signed a joint mortgage such that she put more money upfront but lower payments(£400), I put less money but higher payments(£600). We both will own 50% of the house.

First two years we both paid our shares.
Third year I stopped paying and she kept paying for both.

The extra money she paid for the mortgage(£600) counts towards her shares, doesn't it?

ie. am I correct in assuming that; when she pays my debt as well, from lenders point of view it wonn't make any difference but from investmet/ownership point of view she will be 'boosting' her share (or shorten her loan period).

Thanks in advance.

CLAPTON

In general no, but it all depends exactly on what the agreement (if any) says.

However, the lender doesn't care as long as the mortgage is being paid.

Thrugelmir

Lenders just require payment of the debt.

If you own the property on a 50/50 basis then that will be the starting point of division of the equity if the property is sold from a legal prospective. You'll need to draw up an agreement if you wish the matter to be dealt with in any other way. Courts are not interested in arbitrating "bun fights".

kingstreet

ozyris wrote: »

Me and my partner signed a joint mortgage such that she put more money upfront but lower payments

You don't "sign" subject to such stipulations. You accept a mortgage on "joint and several liability" which means the lender can get its money back from whichever of you has the ability to pay.

Whatever agreement you make between yourselves is up to you, but it has no impact on the mortgage or the lender.

It may be prudent to make arrangements for circumstances where you split up making a loss, or split up making a gain, but as mentioned this has no impact on the mortgage at all.

ozyris

Thank you very much for the replies.

Sorry if I'm being naive, so I udnerstand that when we get a mortgage we'll sign 3 pieces of papers;

-The mortgage agreement - which will make both of us liable to whole sum
-The deed - which will show our agreed shares of the house assuming there won't be any problems
-An agreement between us to be used if things go wrong. And this document can alter the shares shown in the deed in above scenarios.

Thanks again.

Thrugelmir

ozyris wrote: »

-An agreement between us to be used if things go wrong. And this document can alter the shares shown in the deed in above scenarios.

Only if you ask your solicitor to do so. You will need a declaration of trust drafted to cover the various scenarios. The more complex you make it the more costily it will be to have drawn up.

In the majority of cases a declaration of trust is just used to protect the initial deposits provided by each party.

ozyris

Thats most helpful Thrugelmir...Thanks for your time.

I've quickly made a google search and looks like 'declaration of trust' will cost minimum £150+VAT.

THere are two scenarios I can think of at the moment...

1 - separation / divorce

-first option is to vacate the house and rent it out. Both keep making monthly payments
-second option is one will leave the house. The one stays will pay rent(half) to the other one and will be responsible for council tax, bills maintenance etc. Both pay the mortgage.
-third option if above don't work is to sell the house. Deal is off.

2 - Payment issues - both making overpayments, one paying more, one none etc.


But anyway, at least now I roughly know how 'joint mortgage works' and where and what to look for. Thanks a lot Thrugelmir

Dave_the_Ginger_Cat

You can also look at the differences between Joint Tenants and Tenants in Common

There is lots of decent commentary on this online
http://www.thisismoney.co.uk/money/news/article-1594984/Tenants-in-common.html seems fairly helpful

This again is helpful for protecting deposits and has some ensuing benefits in wills.

Thrugelmir's right - much of the cost will depend on the complexity of what you are looking to do.

You may also find that in the event of a breakup, then you may be able to come to agreement between you, but this does assume matters are amicable. When I (we) sold the last house, we'd kept good records of who had put what in, including lump sums and divvied up the proceeds on that basis.

Good luck, and hope you don't need to invoke any of this

Buckingham19

Your whole situation will depend on two factors.

1. How you own the house. If you own jointly then you both own 100%. You need to check the Land Registry and look for restrictions. If you own Tenants in common then you will own a % and have an agreement that supports this.
You can change this but you will need a professional. Do not assumme because you both own the house together you have a %.
If you own the house jointly and one dies the other immediately owns the house.
2. what agreement was originally drawn up. What did you ask for and what did you get.

However a mortgage is simply a debt and has nothing to do with who owns the property. You are both liable.
You both need professional help

Buckingham

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