Mortgage with or without spouse?

Goldiegirl

Would you be happy if your wife applied for the mortgage by herself on your joint home?

If you don't feel comfortable with that idea, why do you think it's a good idea for you to be sole mortgagee?

Unless your wife has credit score issues, I think most people would agree she should be joint mortgagee on a jointly owned home.

Indeed, most lenders require that the names on the mortgage and the deeds should be the same.

ValHaller

Farside wrote: »

My wife is also from a non EU country and i have not applied for a joint mortgage with her simply because her credit file will not be good, She cannot go on the electoral roll, She has no creditcards to show payments etc. Also she doesn't work so there's no benefit for the application for me.

All of these things might not result in a 'good' report. But what is really important is that there is nothing bad. If she has no credit cards, she is not likely to get into trouble. My wife has never had a credit card and virtually nothing reportable in her own right on a credit report. We do have a joint bank account and we never had a problem with a mortgage.

I think you owe it to your wife to start from the position that she should be on the mortgage and the deeds rather than starting from an as yet unfounded premise that she will prejudice the application. Only back down from giving her a full equal stake if it becomes apparent in fact rather than speculation that lenders will not accept her.

mickael28

One of my friends replied today and it turns out they had not told me the whole story... they applied for a new-built house in both names, with the idea of the husband getting the mortgage and both of them being in the paperwork but they ended up not putting her anywhere to speed the process up (I didn't know that part). Let's see what my other friend say. Good that you guys made me aware...

The main doubt at the moment then is that if your wife has a pretty low salary, even if she's approved in a mortgage application, she won't be able to afford the mortgage anyway if something happens. So not sure if that'd be better or worse for her than not being in the application in the 1st place?

Goldiegirl

If 'something happened', I assume you will have life insurance to pay off the mortgage in the event of your death?

If it's a joint mortgage and the property is held in joint names, the life insurance would pay out, the mortgage would be paid off, and the property would revert immediately to your wife (assuming joint tenancy)

If the mortgage and property were in your sole name, the mortgage would be paid off by the life insurance. But the property would have to go through probate to be transferred to your wife (assuming you have a will), which is obviously a lot more hassle.

As I said before, unless you would be comfortable with a mortgage and property being in your wife's sole name, why would you consider it ok to proceed in just your sole name?

ValHaller

mickael28 wrote: »

.... The main doubt at the moment then is that if your wife has a pretty low salary, even if she's approved in a mortgage application, she won't be able to afford the mortgage anyway if something happens. So not sure if that'd be better or worse for her than not being in the application in the 1st place?

Most mortgages to FTB couples at any rate are actually too big for 1 of the couple on their own. This is the norm and it is addressed by life insurance - or the life insurance component of an endowment policy

mickael28

Goldiegirl wrote: »

If 'something happened', I assume you will have life insurance to pay off the mortgage in the event of your death?

If it's a joint mortgage and the property is held in joint names, the life insurance would pay out, the mortgage would be paid off, and the property would revert immediately to your wife (assuming joint tenancy)

If the mortgage and property were in your sole name, the mortgage would be paid off by the life insurance. But the property would have to go through probate to be transferred to your wife (assuming you have a will), which is obviously a lot more hassle.

As I said before, unless you would be comfortable with a mortgage and property being in your wife's sole name, why would you consider it ok to proceed in just your sole name?

Well, TBH, I wouldn't mind at all if everything were than in her name, ie, I don't see a problem; that's why we were considering the other way around as well as a possibility.

Reading about this joint tenancy you mentioned. I've seen there's another possibility that to be tenants in common where articles say that it'd be better to reduce Inheritance Tax in the future, or to avoid the house being taken in case of high care costs, etc.

Would that change anything regarding the life insurance? ie, would they just pay half of the mortage for example and then she'd have to keep on paying her other half in case of death for example?

ValHaller

mickael28 wrote: »

Reading about this joint tenancy you mentioned. I've seen there's another possibility that to be tenants in common where articles say that it'd be better to reduce Inheritance Tax in the future, or to avoid the house being taken in case of high care costs, etc.

Joint Tenants means that the house is not part of the estate and passes direct to the spouse. Generally, for spouses you start out as Joint tenants and change to Tenants in Common when you have a need to. Unspoused groups of buyers start out as Tenants in Common because it is easier to deal with going separate ways. For marrieds the divorce laws mean that this advantage does not apply.

mickael28 wrote: »

..... Would that change anything regarding the life insurance? ie, would they just pay half of the mortage for example and then she'd have to keep on paying her other half in case of death for example?

Life insurance is always for an amount in £, not for 'the mortgage'. So buy enough to cover the whole mortgage.

mickael28

Ah, thanks for the life insurance explanation, I was not quite sure...

ValHaller wrote: »

Generally, for spouses you start out as Joint tenants and change to Tenants in Common when you have a need to.

But if there are a few possibilities where it might be better to be Tenants in Common, why not just start as that (even for a married couple) rather than maybe changing down the line? (unless there are some cases when it's not convenient?)

mickael28

kingstreet wrote: »

I know of no UK mortgage lender which allows more owners on the title, than there are named on the mortgage.

I can't think how they would repossess in the event of default if they are unable to use the mortgage terms against one of the owners.

I'm always open to learning something new. If you get details, I'd be grateful. There are lenders who will allow more borrowers than there are owners, but that's basically the other way round to our issue...

Hiya,

My wife managed to talk to her friend this weekend and what she told her is that she's not in the mortgage (as she decided with her husband to not apply) but then the solicitor asked them if they both wanted to be owners, they said yes and they did some paperwork with the solicitor.

Her friend didn't say anything about having done any paperwork with the bank.

I wonder now if her solicitor has communicated this fact to the lender? By reading the comments above it seems you need to ask the lender first rather than the solicitor just doing whatever paperwork is required, should our friend ask something to her solicitor to make sure they're not doing anything they're not allowed?

Many thanks!