Transferring a Mortgage between Properties

gw1

Holly - you pretty much have it - except that I am going to pay a small amount of the deposit on GF's new home now so will already be part owner when in future bringing this up to 50/50.

There is no ERP on my product now. I understand it is portable but I wasn't sure if it complicated things by jointly buying with GF in future. It looks like it does

Thanks for your input

holly_hobby

If GF declares that part of her deposit is gifted, and that the "gift" is actually in exchange for the donor's future agreed right of residency - her lender will decline the application ...

Also, what happens if you split before you obtain legal title ..... what will happen to the small amount of deposit you have presnetly agreed to give her ?

Just something to be mindful of ...

Holly

gw1

holly_hobby wrote: »

If GF declares that part of her deposit is gifted, and that the "gift" is actually in exchange for the donor's future agreed right of residency - her lender will decline the application ...

Also, what happens if you split before you obtain legal title ..... what will happen to the small amount of deposit you have presnetly agreed to give her ?

Just something to be mindful of ...

Holly

The plan was that I would own that proportion of the property - I think you can do it as tenants in common

Thrugelmir

gw1 wrote: »

The plan was that I would own that proportion of the property - I think you can do it as tenants in common

You would need to be on the new mortgage to achieve this.

gw1

Thrugelmir wrote: »

You would need to be on the new mortgage to achieve this.

Hmmm, this seems much more complicated than I thought.

I assumed it would be possible to make it clear that I only owned a small percentage of the house (say 5%). The mortgage amount would be solely in GF's name and is much less than the remaining value of the house

gw1

Sterling_Mortgages wrote: »

I have another option for you.

Would you consider renting out your property?

If so, you could re-mortgage your current property to release the funds to jointly buytthe house with your gf now.

You could release around 75% of the property value, use this along with your 10k, buy the house now and then you will only have to pay one lot of stamp duty.

What are your thoughts on this course of action?

The problem is that I have a need to be resident at my current property for the next couple of years so can't rent it out

holly_hobby

Sorry .... but those named on the deeds (whether TIC or JT), MUST be party to the mortgage, this is to do with possessionary rights, and the lenders successful pertition to the court for a posession order (in the event of default by the mortgagor).

To be party to her mortgage, your income would need to be sufficient to service your current mortgage (if CTL is not sought), and if you seek CTL with NW you're off the current product you have (which will be for residential lending only)

Hope this helps

Holly

Thrugelmir

gw1 wrote: »

I assumed it would be possible to make it clear that I only owned a small percentage of the house (say 5%). The mortgage amount would be solely in GF's name and is much less than the remaining value of the house

Doesn't work like that. The mortgage company will not allow parties to be named as having title to the property but not on the mortgage. As would cause them untold problems in the event of repossession.

gw1

Thanks everyone, I'm learning a lot!

How about this for another option:

Instead of contributing to the deposit we apply for a joint mortgage (assuming this is acceptable to the lender in addition to my current mortgage) and that I can afford to pay it.

So purchase price £220,000

GF pays deposit of £60,000

Joint mortgage of £160,000 with house held as tenants in common.

I haven't quite got my head around how we'd work out who owns what percentage though! (36%/64%?)

Thrugelmir

Can you afford both mortgages? That's the question the lender will ask.

Division of a property into shares is easily dealt with using a Declaration of Trust that your solicitor can draw up.

Why not wait until you sell your own property before acquiring a share in your g/f's? Would be far simpler.