Name on Deed and Mortgage

debbiedingle

Hi I am about to purchase a new house. I am using all the money from the sale of my house now to put towards the new house. A friend wants to invest in my house also to help me to buy it. So he is arranging a mortgage for the rest of the money. I am investing all my money which is approx. six times the amount he will need to invest. He will not be living there it is my house. However he has been told by his mortgage provider that my name must go on the mortgage and his name must go onto the deeds. I am very concerned about this why do I have to go on the mortgage when I am already paying the largest amount for investment and why does he have to go on to the mortgage when its not his house he wont be living there. I am afraid of the implications of this. The idea was my name on the deeds and his name on HIS mortgage. Can anyone explain to me where I stand legally with this and if he has been given the correct advise from his mortgage advisor.
Many thanks

Thrugelmir

Sounds too complex too be workable as many issues arise.

Both parties will need to be named on the mortgage and the deeds in order to provide a basic degree of protection for the parties concerned. Even then there's much to be agreed and legally documented.

ValHaller

Mortgages are always primarily on a property. So the names on the mortgage are the names on the property. Can you not take out the mortgage yourself?

Beckyy

A mortgage company would never let somebody take a mortgage out if their name was not on the deeds of the house because the house is used as security against the loan so if your name was not on the deeds then you would not own the house and the mortgage company could not repossess it if you defaulted on payments.

A mortgage would have to be taken out with whoevers name(s) are on the deeds, if you were to take out a joint mortgage as joint owners then you would also be liable for the debt and if he were to default on payments they would chase you for them. You would also be financially linked, so his credit rating could affect yours and vice versa. He also wouldn't be investing in the property if his name wasn't on the deeds as he'd have nothing to show for it and would rely on your goodwill to return his money and any profit.

I wouldn't entertain the idea if I were you, it wouldn't be a good deal for either of you. Either take out a mortgage yourself or wait until you can if you're not in a position to at the moment.

ethank

Beckyy is completely correct. No lender will allow a person not on the mortgage to have an interest in the property, as does not allow them security over the property.

Kynthia

As far as the mortgage company are concerned, they are lending on the whole property and not just his 'share' of the property. They want everyone who is on the deeds to be on the mortgage so that you all are signed up to their terms and conditions which makes it easier should they ever repossess. The fact that the owners may have biught as tenants in common or have a deed of trust showing their unequal ownership percentages is of no interest to them.