Seperate Residential mortgage for husband and wife

meltingfire177

Dear MSE members

This is my first post to the forum. I have been a silent follower and active user of MSE and appreciate the contributions. Now I need some help and though the lovely fellows here will have some input.

I live with my wife in a rented accomodation and both of us work full time.

My wife wants to buy a house on residential mortgage as sole ownership which she will pay for (deposit+mortgage installment etc). I intend to live with her for now. But I do not want to be on the mortgage or any sort of documentation for several reasons like I want my credit history not affected by this, I want open choice to have my own mortgage and I don't want relationship changes affect anything.

Our marriage is not registered in the UK but another country. I am not sure what constitutes a 'legal marriage'.

I want to know:

1. Do I have to be named on the mortgage she takes? (as contributor)
2. Do I have to be named on house title as a tenant and how does it affect me and my mortgages in future?
3. Can I buy a house on my own name as residential mortgage at later stage, let's say 2 years later? I will live in it time to time as I need my own space sometimes as I am home based worker. I might also want to rent it out.

I have been told you can not get separate residential mortgages which sounds odd to me. If both of us earn good enough to afford it, why not?

I would like to know what the actual situation is. If its not possible, what are alternatives or workarounds. I know there are always those loopholes and ways to avoid funny laws.

All help much appreciated.

Thanks
AM

Yorkie1

Mortgage lenders usually require the same people to be on the mortgage and the house title deeds, so you couldn't be on one and not the other.

If you plan to buy and rent out a second property, you need to know that you can't just get a residential mortgage and rent it out. You either need to get the lender's permission, or you need a buy to let mortgage.

I don't know the answers to your other questions but I'm sure others will be along to help.

holly_hobby

meltingfire177 wrote: »

My wife wants to buy a house on residential mortgage as sole ownership which she will pay for (deposit+mortgage installment etc). I intend to live with her for now. But I do not want to be on the mortgage or any sort of documentation for several reasons like I want my credit history not affected by this, I want open choice to have my own mortgage and I don't want relationship changes affect anything.

If you already have any joint accounts, you are already financially associated.

Whats the real driving factor behind your requirements to remain completely detached, if you or your wife don't currently have, or have any intention of obtaining, any adverse credit data ?

meltingfire177 wrote: »

Our marriage is not registered in the UK but another country. I am not sure what constitutes a 'legal marriage'.

I want to know:

1. Do I have to be named on the mortgage she takes? (as contributor)

No - you don't have to be a joint mortgagor, if her sole salary is sufficient to service the mge (and she passes credit/stauts checks)

1. meltingfire177 wrote: »

   Do I have to be named on house title as a tenant and how does it affect me and my mortgages in future?

You have to be named as a resident, and as you are over the age of 17 will ahve to sign a consent to vacate disclaimer - which means that should your wife default on the mge, you are unable to prevent possession of the lender

1. meltingfire177 wrote: »

   Can I buy a house on my own name as residential mortgage at later stage, let's say 2 years later? I will live in it time to time as I need my own space sometimes as I am home based worker. I might also want to rent it out.

You may of course seek to purchase a 2nd property as a 2nd residence, but if a mge is reqd it will be subject to your status and affordability, and the reasons for a you seeking a 2nd main residence, in the same town etc as your spouse, which may not be attractive to the lender (whom may see this as an attempted back door buy to let application).

If you do obtain a mge for your 2nd property, where you say you will reside on an ad hoc basis (NB - unoccupany for over 30 days will invalidate standard b&c insurance, and you will need to seek B&C for extended unoccupancy.

You say you may later want to let this out.....

If you do obtain a residential mge with the lender being aware of the unusual marital residence situation, and you later want to let, you must seek the lenders "consent to let". If they refuse, you must remortgage onto a Buy To Let mortgage. You must not let without the lenders permission, as you will be in breach of your mge and b&c t&cs.

As a married couple you may only have ONE recognised primary residence for tax purposes, so holding 2 properties, will hold CGT implications (net of permitted deductions/reliefs and exemptions) upon the disposal of the property that is either deemed by HMRC or nominated by you, not to be your main residence, and which will obviously apply to any property that you let.

meltingfire177 wrote: »

I have been told you can not get separate residential mortgages which sounds odd to me. If both of us earn good enough to afford it, why not?

Thats incorrect - you can obtain sep resi mges, the issues for lenders will be why a married couple would want to reside separately in the same area(suggesting that you may indeed be buying to subsequently let out or for another contrived purpose). I have discussed the CGT implications re multi property ownership for married couples above. (by the way if you were lawfully married, whether in the UK or another country, you are legally married, and to seek to claim otherwise for financial gain would be fraudulent).

meltingfire177 wrote: »

I would like to know what the actual situation is. If its not possible, what are alternatives or workarounds. I know there are always those loopholes and ways to avoid funny laws.

All help much appreciated.

Thanks
AM

Unfortunately won't advise on finding loopholes or helping you to evade laws (tax or otherwise) .... sorry

Hope this helps

Holly x

meltingfire177

Thanks for the response - much appreciated.

I am definitely not trying to avoid any tax or let the property buying it on residential mortgage.

Here is my situation:

My wife will buy a property on sole ownership on residential mortgage where the two of us will live.

The reason I want to buy a property seperately on sole ownership is to allow my family to live there while they are in UK. My brother will be in UK for study for a few years and my parents, as they are retiring soon, will be visiting us for a few months every year. I would like to have a second residential property where they can live when they are here. I do not want our privacy to be affected so would like them to live is a second home.

Please advice. Thanks!

holly_hobby

Ok, so its generally just as a 2nd property for ad hoc family use, not for commercial benefit or as a holiday home.

You'll have unoccupany issues as discussed above, and if you are unable to obtain blds insurance, you won't be able to secure a mge.

The underwriters will have to be happy with the purpose of pch.

This IMHO will technically be seen as a 2nd property pch, as you reside with your wife as a married couple, in a property that is mortgaged (albeit in her name), and where I am assuming you equally contribute to the bills, and if your wife lost her job you would take over the paying of all commitments.

So you will need at least 15% deposit, possibly more depending on the lender, and if they are happy with the reason for pch.

You will be subject to CGT to a degree (dependant upon applicable exemptions/reliefs) on disposal.

You need to spend an hour of so with a whole of market mortgage broker, take with you a copy of your credit reports, income and joint and household commitments - they'll advise whether there will be a home for this based on the figs you present.

Hope this helps

Holly