remortgaging nightmare advice please

tree38

we bought a house two years ago jointly with my mother in law.We were told she had to be named on the mortgage due to financing the deposit. We are trying to remortgage and to have her name removed so we can extend the years but appartently mortgage companies will not accept her living in the property still. does anybody know of any way round this situation

Foxy-Stoat_3

Do you need to re-mortgage? My rate went down by 1% after the fixed term ended. Can you not remortgage with the existing lender?

She doesn't need to be named on the mortgage/deeds due to the deposit. If she completes a transfer of equity and you fit their affordability calculators then you can remove her name. The only reason why she might want to be named on the mortgage is to protect her cash deposit. You can write up a deed of trust that protects her interests if the property is sold in the future or if the relationship breaks.

tree38

we can get her name taken off but mortgage companies are not happy for her to remain living in the trust have had a deed drawn up to say in the event of sale or repossession the mortgage is to paid off first.
We were advised to take a part repayment part interest mortgage in the beginning and were advised when we remortagaged and removed her name we could change it over to repayment. Turns out its not as easy as that.

Foxy-Stoat_3

tree38 wrote: »

we can get her name taken off but mortgage companies are not happy for her to remain living in the trust have had a deed drawn up to say in the event of sale or repossession the mortgage is to paid off first.
We were advised to take a part repayment part interest mortgage in the beginning and were advised when we remortagaged and removed her name we could change it over to repayment. Turns out its not as easy as that.

Doesn't make much sense, sorry.

A deed of trust is between you, your partner and your Mother in Law, nothing to do with the lender. It should state that the deposit from the Mother in Law is £25,000 say and in the event the house is ever sold then you and your partner should pay her back in full out of the proceeds of sale. There is no way that the deposit can be paid first before the mortgage is settled.

Having her named on the mortgage protects the equity but it also makes her liable for the debt.

tree38

THe deed states the mortgage is settled first but because she has previously been on the mortgage they are not happy for her to remain in the house if she was to move out there would be no problem.

Thrugelmir

tree38 wrote: »

THe deed states the mortgage is settled first but because she has previously been on the mortgage they are not happy for her to remain in the house if she was to move out there would be no problem.

Correct.

In law your MIL has an arguable case as having a vested financial interest in the property, primarily as a home. As the lender is already aware of this fact. Remortgaging without her being named, infers that the lender is happy with this arrangement. Which they are obviously not. Hence their response.