Protecting Investment?

silver0101

Hi,

I am getting a mortgage in my name only. My parents want to "give" me £XXXX deposit. They want their money to be secure and wonder by what action/paperwork this could be guaranteed by law?

The perceived threats to the safety of my parents money are as follows:

My husband has previous debts (pre-dating before we met), and which he is servicing in agreed plans with the creditors.
My husband has an ex-wife. They divorced a long time ago and she has remarried. When they divorced, there was no consent or court order, only a verbal agreement in place.

Please note the following context:
My husband and I have no, nor ever have had, any financial associations.
My husbands debts are in his name only.

My parents fear that if I had a mortgage, my husband's creditors could "chase" me for money relating to his past debts. Is this correct?

How can my parents shore up their money to give them the peace of mind they desire, so that it could not be touched by my husband's creditors, or, indeed, his ex-wife?

Is it necessary for me to protect my interests in the mortgage so that my husband's creditors could not lay claim to my house. This begs the question, is there any possibility that the creditors could legally lay claim to any asset of mine?

Please could you advise me (and by default my parents) about what we need to do, and what we can do?

da_rule

The only thing you can really do is have a contract drawn up, making it explicit that they money is being lent to you only and there is no joint ownership. You cannot offer them security over the house as the mortgage company would not agree to it. Are you buying the house as joint tenants or tenants in common? There are specific rules about when a debtor can make claim to a family home, and with the exception of the mortgage, these require the person with the debt to be bankrupt. If you own any other joint property (furniture etc) then this is easier for them to claim (they just have to give you 50% of the value).

bob2

To clarify....

- You are purchasing a house in your name only.
- You are taking out a mortgage in your name only.
- Your parents wish to give you money to use as a deposit.
- Your husband will live in this house with you.

Correct?

dimbo61

Do you have any deposit saved up yourself?
Have you looked at YBS offset mortgages and friends&family!
Bank of Mum and Dad put money into offset savings account in there name but offsetting your mortgage.

da_rule

If the assertions made by b!!! are correct then your husband will essentially be a tenant (whether you charge him rent or not is a different matter). The mortgage company (if it's a mortgage solely in your name) will ask for a deed of consent. This means that the interests of your husband (and his creditors) cannot out weight the mortgage companies interest in the property.

bob2

Of course you also need to consider the situation that could arise if you were to separate.

Presumably then, whether or not the house is in your name, any equity in the property would be up for grabs in a divorce settlement.

da_rule

Unless you protected it by making him sign a licence to occupy which stated he had no claim on the property (romantic I know).

Freecall

silver0101 wrote: »

My husband and I have no, nor ever have had, any financial associations.

How times change.

TBagpuss

If the house is in your name alone, then your husband's creditors will have no claim against it; they can only claim from him.

The same is true of his ex wife.

Your husband would have a claim against the property if you and he were to separate.

If your parents give you money, it becomes yours, not theirs, they can't protect it, or seek to treat it as a gift or some pruposes and a loan for others.

If they want to protect it then you need to recognise that they are not giving it to ou. Either they are lending it to you, in which case you need to have that formally recorded, and to speak to your solicitor about how to manage that without causing any problems with your lender.

Alternatively they could treat it as an investment in the property in which case you would need a declaration of trust setting out what their beneficial interest in the property is.

In either case, their interest / security would be second to that of the mortgage company.