What's the difference between 'borrower' and 'mortgagor'?

kingstreet

When you come to complete a house purchase, the solicitor asks the borrowers who are party to the purchase to sign the mortgage deed. This is the legal document which ties the borrowers and the loan to the property to be used as security.

I have no idea why you're being given the impression it costs so much to add you to the mortgage/property.

Doing it during the purchase process should cost nothing extra and adding you to the mortgage and deeds later, after completion, should cost about £600, inclusive of lender and solicitor costs, for what's known as a transfer of equity.

Don't confuse the title deed, or ownership of the property with the mortgage deed, which is described above.

mooncake

So it can be done, and without any additional cost. The only problem is who are the borrowers.

In the letter from the bank,
Mortgagor: Name of my husband and me
Borrower: Name of my husband

My solicitor said only the borrower could be the owner, no matter who are the mortgagors. And he won't explain what's the difference and give any advice. But the bank said I could be the owner as well----that's the reason they listed me as a mortgagor.

My solicitor said it's a problem betweem the bank and me. But I think it's somehow a legal issue. I would like to pay him for some explanation or advice. The mortgage adviser from the bank is very nice and doesn't want us miss the opportunity to add my name on. But my solicitor insists he can't do it. Who else can I ask for an opinion? Another law firm?

mooncake

I am more confusing now. Whose name will be on the title deed? What is it up to, to have the ownership of the property?

kingstreet

If you look back at my first post in your thread, I laid out for you what normally happens.

Your husband has applied for a mortgage without including you. This would normally preclude you from being named on the deeds, as most lenders want the same borrowers named as owners and vice-versa.

I don't know why this borrower/mortgagor issue has come up and I don't know what the implications are if you are neither a party to the mortgage nor a party to the ownership. I would imagine it will come up later and the solicitor will have to report is to the lender as an error for amendment.

In my opinion, the best option would be your inclusion on the mortgage and the ownership/title deeds so you purchase the house jointly with a joint mortgage. I do not know if that is now possible, or desirable, from your viewpoint.

As far as I'm concerned, it should be single mortgage application, single purchase, single mortgagor, or joint mortgage application, joint purchase and two mortgagors. I agree with your solicitor, the lender needs to have consistency in its borrowers, mortgagors and owners. That is simple logic.

kingstreet

Terminology;-

borrower - someone applying for, or named on, a mortgage loan

mortgagor - someone who owns a property linking a loan to that property as security

Borrower and mortgagor are normally the same person/people.

owner - someone named on the title deed to the property

mortgagee - the lender providing the loan

mortgage deed - the document used to tie the loan and property together.

mooncake

It sounds the solicitor is right. But it seems that the bank doesn't have the consistency as what you said. The mortgage manager is contacting my solicitor now. I'll see what's the result of their conversation.

So it's nothing for me to worry about at the moment? The bank and the solicitor will solve this problem later on?

kingstreet

As your solicitor acts for the lender, as well as acting for you, it's upto him to report to them and resolve any discrepancies in the paperwork.

mooncake

Another question. If I can't add my name to the deed at the beginning of purchasing a property, why can others do so later on (who still pay for mortgage)?