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buying half share of private property

I may he able to buy a half share in a house. It is for private use. I would gave a mortgage but the other half would be owned outright. before I start hunting around, is this likely to cause any problems in getting a mortgage?

Comments

  • BobQ
    BobQ Posts: 11,181 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    edited 16 December 2012 at 8:00PM
    You can own a property as tenants in common (ie you each own a share of the house which in theory you can sell and bequeath in a will in different ways). The problem you will have with a mortgage is that you cannot really have a mortgage on half a house without complications. The mortgage provider will want to know what happens in the event that you default on your mortgage and that will inevitably involve the owner of the other half in making commitments about such a scenario.

    Even if you did not have a mortgage it would be silly to enter into any form of joint ownership unless you also had a deed setting out what happens if one party wants to sell and the other does not, or if one party is unable to pay for essential maintenance etc. This can easily be drawn up. With a mortgage on one part, the mortgage provider would want some agreement/guarantee to cover what happens if you default on your mortgage and how they get their money back.

    As ever what is possible will depend on the exact circumstances.
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • loubel
    loubel Posts: 996 Forumite
    Part of the Furniture 500 Posts Name Dropper
    You can't get a mortgage on half a house only. If you need a mortgage then the two of you will need to get one together.

    Who are you planning on buying a house with? Will you be living there together?
  • bribri_2
    bribri_2 Posts: 271 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thank you for the answers.

    Only I would be living in the property. Yes we would have to get some legal documents to set out obligations. The property is owned outright by one person. I can't afford to wholly buy the house but I can afford (with a mortgage) half of it.

    So if it was e,.g valued at £400,00, I would get a mortgage for 200K. It's sort of like saying I am putting a 50% deposit dwn (the share already owned) but from what you are saying it doesn't look like the mortgage company would go for that.

    Alternatively, Has any one ever just bought from someone privately and paid them off in stages? (obviously big risk for the vendor)
  • LandyAndy
    LandyAndy Posts: 26,377 Forumite
    Part of the Furniture 10,000 Posts
    Would be much easier to buy all of a smaller house.;)
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Look at shared ownership issues.

    Normaly you would need to pay rent on the other 1/2.

    Who pays for maintanence/improvements

    Exit plans. when one of you wants/needs out or dies.

    CGT issues for the non occupier
  • kingstreet
    kingstreet Posts: 39,232 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    You can't get a sole mortgage on a property which is jointly owned. The lender would be unable to repossess if the mortgage holder defaulted on the payments.
    So if it was e,.g valued at £400,00, I would get a mortgage for 200K. It's sort of like saying I am putting a 50% deposit dwn (the share already owned) but from what you are saying it doesn't look like the mortgage company would go for that.
    If it could work in such a way, the other party's half would not be your deposit as it isn't part of the bit you will own.

    You're trying to get a 100% mortgage on your share of half a property.

    Not going to happen. Sorry.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • holly_hobby
    holly_hobby Posts: 5,363 Forumite
    1,000 Posts Combo Breaker
    The mortgage lender will want all owners to be party to the mge (regardless to how the deeds may be written, tenants in common or joint tenants), and as such the current owner will need to go onto the application with you.. Furthermore it would be classed as a remortgage with simultantous transfer of equity (this is because the current owner already holds title, to which you are being added).

    Even if he agreed with this, as he would be a jnt mortgagor, he is also legally liable for the mge repayments along with you ...... so you can see there are several reasons why this is a complete dead duck idea.

    You may of course arrange a private mge arrangement - bit its fraut with legal requirements and complications.

    My advice, this isnt' for you.

    Hope this helps

    Holly
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