Names on Deeds/Mortgage?

Kwaker_Knacker

Me and my sister want to but a house for our parents. Originally, it was decided that as I was now mortgage free, we'd buy the place and the mortgage would be in my name (and my wife's due to the joint income needed to get what was needed mortgage-wise), but we'd split the payments 50/50.

Now my sis wants to be on the deeds for financial security reasons (which I understand, I'd be the same). She's raising her half of the house price by re-mortgaging her house to take some of the equity. Her house isn't fully paid off. I don't want to do this for my half as my house is paid off and I want it to stay that way, I want the mortgage attached to the 2nd place. Me and the wife have no problems getting way more than the half of the price for the new place as we've been into our bank about it.

However, I've read that a person cannot be on the deeds if they aren't on the mortgage. Firstly, is this correct? And if it is, can anyone suggest a way to overcome this?

Is it possible to put my sister on the mortgage but having zero income (with her having a mortgage of her own etc etc) so she can have her name on the deeds as a legal part-owner? Or will banks not allow this?

Hoping to speak to someone in branch by the end of the week when I get time but any advice from knowledgeable MSE folk will be much appreciated before I speak to them. It'll give me some idea of what to ask them without sounding like a numpty :eek:

Many Thanks,

K_K

Thrugelmir

Kwaker_Knacker wrote: »

However, I've read that a person cannot be on the deeds if they aren't on the mortgage. Firstly, is this correct? And if it is, can anyone suggest a way to overcome this?

Named on deeds but not on mortgage, stops the lender from forcing a sale should the need arise. As simple as that. So there's no alternative if the property is mortgaged.

Seems easy to obtain a joint mortgage on the property you are buying.

Your sisters lender may not be keen on the purpose of the release of equity either.

Annisele

Some thoughts - some of which will likely be teaching you to suck eggs:

If the "branch" you're talking about is a bank branch, they may not be the best people to talk to about this. It's a slightly unusual situation, and the bank staff you're likely to see if you just pop in might not be able to help you. It's possible you'd get more useful help from a broker than a bank.

If you want a mortgage secured on the new property, then all the owners of the new property will have to be on the deeds.

If your parents will be paying rent for the property, then it'll be a regulated buy-to-let (regulated because you'll be letting to close family members). Not all buy-to-let lenders offer regulated BTL mortgages.

It's certainly possible for your sister to have two residential mortgages, but the lender would want to be sure both are affordable.

If you take a joint mortgage with your sister, you'll be financially linked to her. That may not be a problem, but make sure you understand the implications.

All the people named on the mortgage will be "jointly and severally liable" for it. That means that if you do take a joint mortgage with your sister, and you don't pay for whatever reason, your sister will have to pay the whole amount - there's no "my half" and "her half".

Also try to consider what you'd do in the event of the death/divorce/bankruptcy/long term illness of everyone involved - you, your wife, your parents, your sister, plus anybody else this affects.

Kwaker_Knacker

Thanks for the replies.

No rent involved from my folks, this was a stipulation of getting a 2nd property mortgage. Nationwide were sound about allowing close family to live in it providing there was no rent involved.

My sis has gone off the idea of us going half and half cos straight away I said I wanted to overpay. She ain't keen on this and this is why she's raising her half of the money from her own place. So any mortgage will have her name on by the look of it, but the payment will be solely mine. I understand if I don't or can't pay, she'll be liable for the payments. I'm hoping this will never happen.

Thanks,

K_K