Deeds and deposit worry

PJV2098

Hello all

Here's the problem / nightmare we have ...

We're first-time buyers.

I work and my partner doesn't. Because of this, the lender advised we have a single mortgage with only my name on it.

The deposit is coming entirely from my partner however.

Our solicitor today advised that the lender "security" will reject this because having a person whose name is not on the deeds providing deposit is a big no-no.

This has come as something of a shock.

Can anyone please advise or calm my panic?

GMS

Why can your partner not go on the mortgage as a non earner?

Providing the deposit and not being named on the mortgage would cause issues if the lender needed to repossess.

Goldiegirl

GMS wrote: »

Why can your partner not go on the mortgage as a non earner?
.

Exactly the question that popped into my mind.

The lender will want the mortgage and the property to be held in the same names.

So, in this case the partner is contributing to the house purchase by providing the deposit, but would not be part owner of the property.

If I was the partner I would not find this to be acceptable at all.

Unless the partner has a history of CCJ's and defaults, there's no real reason for them not to be on the mortgage, whether earning or not

PJV2098

Thanks for the fast replies.

Reason for partner not being on mortgage application is not earning and therefore restricting what can be borrowed (e.g. 4 x my earnings in sole application, but only 2.5 x when joint).

Hence we were told by lender to have me as sole application in mortgage and deeds both.

GMS

PJV2098 wrote: »

Thanks for the fast replies.

Reason for partner not being on mortgage application is not earning and therefore restricting what can be borrowed (e.g. 4 x my earnings in sole application, but only 2.5 x when joint).

Hence we were told by lender to have me as sole application in mortgage and deeds both.

Which lender? Were they aware of the deposit situation?

You may find a lender with a more flexible approach. A broker may be worth a chat

PJV2098

It was Nationwide, with whom my partner has an account but not me.

We will speak to them in the morning to flag the matter.

Any more input or advise very welcome. Thanks all.

Goldiegirl

Things must have changed since my day - lenders would use the most beneficial income multiple.

It would certainly be worth shopping around or getting a broker to help you

Thrugelmir

PJV2098 wrote: »

Reason for partner not being on mortgage application is not earning and therefore restricting what can be borrowed (e.g. 4 x my earnings in sole application, but only 2.5 x when joint).

Then on the application form you'll need to declare them as a dependent.

Do you have children?

kingstreet

I was using the Halifax affordability calculator today and the maximum amount available was £97,125. When I added a second applicant to the mortgage, with no income, it dropped to £60,225.

I presume the OP is experiencing similar with Nationwide. I suggest using their affordability calculator to check the impact.

PJV2098

No children no.

Is the idea with declaring my partner as dependent to counteract the drop in what NW are prepared to lend when applying for a joint application as opposed to a single?

My partner is self-employed, to provide more detail. The business is in third year of being and its turnover and hence her income is next to zero.

kingstreet

I've just run a test through the Nationwide affordability calculator and a non-working second applicant takes the sole application maximum from £87,300, down to £68,200.

You don't declare them as a dependent, you simply add them as a joint applicant, enter no income and the system works it out.

If you have evidence of income for two years self-employment it can be taken into account, however small it may be. It's the net profit which is used.

For example, in my example above, adding just £2,000 net profit to the joint application take the maximum borrowing back up to £84,100.