Tricky situation

d0nkeyk0ng

I just found out my fiancee and her brother have got a mortgage for their family home. I knew they were looking to buy a place but figured it would be in his name.

It was probably for convenience to obtain the mortgage. Is my fiancee now locked into it? Could she remove her name from the mortgage later on? Will it affect us financially once we're married?

I was hoping to buy a small place of our own but it looks like it would have to be in my name only and hence limit what I can afford. If five or ten years down the line, we decide to buy a larger property to move into, how would the above situation affect this?

I suspect this will cause further problems down the line and they've clearly not thought it through (or they have and they just give a damn about me in which case I need to reconsider the whole relationship).

Any advice please?

kingstreet

The existing mortgage will be deducted from what is affordable as far as her income is concerned. Best hope is the new lender treats it as a credit commitment, as if she had a loan for that monthly payment.

If she wishes to be removed from the mortgage and ownership of the other property, the lender will establish if the remaining party can afford to take it on alone.

d0nkeyk0ng

The brother will be paying for it entirely. They have other properties from which they collect rent so the money will be coming from there. So the fiancee wouldn't be paying anything towards it but I guess she might be financially responsible if there's a problem (which is where I'm concerned about her name being on it).

If I ever wanted to apply for a joint mortgage with my (hopefully by then, wife), would the lender know about the previous mortgage? Would it affect what happened?

I'm just concerned that there would be a situation where we could never have a joint mortgage so long as she was on her brother's mortgage (in name only).

kingstreet

It doesn't matter who is paying it. She has a joint and several liability so will be treated as her 100% commitment.

Yes. The mortgage would be disclosed and visible on the new lender's credit search. Yes, it will reduce he borrowing power and yours, jointly as I said.

No, this will not stop you having a joint mortgage. It will impact only the amount you can borrow and how that happens will depend on the lender you use. Best case scenario, as I said, is the monthly payment will be deducted from affordability like any other credit commitment, even if she is paying nothing.

suziqqq

Considering you are engaged did you not discuss this beforehand. You assumed the mortgage would be in you fiancees brothers name ???? did you not know. IMO it doesn't bode well for a long term relationship . This will have an impact on your life together especially if your brother in law can't pay for some reason and it falls in your fiancees lap

d0nkeyk0ng

See here: https://forums.moneysavingexpert.com/discussion/4998574

Basically I knew nothing until last night.

ACG

If they both own the property and he is raising a mortgage then her name would have to be on the mortgage.

I find the easiest way to explain this is lets assume the mortgage is £100k. Her income is £50k and she can borrow £200k in total. As she already has a mortgage of £100k, that would mean that she can now only use her income for an additional £100k to purchase a property.

So if your income is also £50k, that means you can both jointly borrow £300k (your £200k plus her £100k).

I think that is a little simplistic, but it gives you an idea of how it could affect getting a mortgage in future.

suziqqq

Have read your other thread and I would be furious if my fianc! has done this behind my back. Relationships are all about trust and i would not trust them after this. Its your life and up to you how you deal with this but if it were me I would seriously rethink if marriage is the way forward

Thrugelmir

d0nkeyk0ng wrote: »

They have other properties from which they collect rent so the money will be coming from there.

Correspondingly will have additional contingent liabilities in the form of other mortgages. Which muddies the waters even further.