Buy solo or with spouse

urgurinder

Hi all

I have had an offer accepted on a property and mortgage approved in principle however the bank wants the wife to sign a letter of declaration stating that she has no financial interest in the property.
I applied the mortgage just in my name as the wife stays at home to look after the young ones. I just thought that once you are married everything you own is pretty much hers anyways and it doesnt matter whose name is the property in. (it probably matters for the super rich guys who need to have contracts signed before the marriage and all but i am talking about your average wage earner)

I have been trying to find a guide about this online and called citizens advice bureau as well but havent got any definitive yes or nos. Asked a mortgage advisor and she basically told that as long as you have a life insurance your wife will keep the house should anything happen to you. I dont know if thats all the truth coz at the end of the day she's got to make life insurance sales as well.

Does it matter if the property is in just my name or if its in joint names(mine&wife)? Should i be looking at getting advice from an IFA on this?

Any advice from MSE community will be greatly received.

Kind regards

kingstreet

If you apply jointly for a mortgage, a non-working spouse will be treated as a dependent by a mortgage lender, reducing what you will be able to borrow and hence reducing the amount you can pay for a property.

I just thought that once you are married everything you own is pretty much hers anyways and it doesnt matter whose name is the property in.

Holding the property in a single name can cause problems in the event of death. Your widow would need to go through the probate/administration process for the property to become hers. Any debts on the estate at the time of death may mean she has to sell the property to pay them if they are the estate's only asset.

as long as you have a life insurance your wife will keep the house should anything happen to you

If you take single life cover, the benefit would be paid into your estate and could also end up being used for debt repayment, not what you intended it for. The payment of the benefit would also have to await probate/administration if you don't write it in trust.

Holding the property as a joint tenancy would mean you both own the property 100% and it would not fall into your estate on death. Taking life cover on the same basis works the same way. You both own the policy proceeds 100% and the benefit does not enter your estate.

You might want to read this for a salutory lesson on sole or joint ownership;-

https://forums.moneysavingexpert.com/discussion/4023273

horngkai

Can one put the spouse name on the property but not the mortgage?

kingstreet

Not normally, no.

Lenders usually insist on the mortgage and the property ownership matching so any enforcement action needed is taken against the correct parties.

I've heard HSBC will allow more borrowers on the mortgage than owners on the deeds, but I've yet to find a reason why anyone in their right mind would do such a thing (other than parents as guarantor, of course.)

urgurinder

Thanks Kingstreet for making that plain clear to me and also for the link to the other discussion. The house must be in both our names.
HSBC is to be the lender, they are happy for the house to be jointly owned but solely mortgaged provided the wife has independent legal advise paid by herself.
So does that mean if I die than mortgage will be paid by life insurance and wife will continue to live in the house without any worries of having to pay the mortgage

horngkai

So if one of the partner does not work but you wanted to put his/her name as the houseowner, how would that work for mortgage as surely putting a 2nd borrower that brings in no money will affect the affordability calculator?

urgurinder

horngkai wrote: »

So if one of the partner does not work but you wanted to put his/her name as the houseowner, how would that work for mortgage as surely putting a 2nd borrower that brings in no money will affect the affordability calculator?

HSBC does not seem to be bothered that my spouse is going to be named joint owner on the title deeds but not on the mortgage. The mortgage offer remains unchanged ie I am the sole mortgage borrower but they are sending the new paperwork to reflect that the house is to be owned by applicant & spouse jointly