Unusual first mortgage situation - advice needed

NewbieRob

Hello

This is a fairly unusual situation that I hoped some people may be able to help with. Grateful for any advice you can give.

I am the much younger half of a couple - my partner of 15 years has owned his own home for some time in which I live and contribute towards running costs. However, worried that I may lose the chance to get on the property ladder when he has passed on, I am keen to find a way to 'buy into' a property, so to speak so I am protected in my future. I don't want to have to rely on inheriting - I'm no sponge, and want to be able to secure my own future. Besides, I don't want my partner's family to lose the chance of their inheritance. A present, I couldn't afford to simply go and buy a property on my own without moving out, which is something I definitely don't want to do.

One idea we have had is to buy a larger home together by the means of my partner selling his home, and me paying a mortgage to cover the remaining cost. Thereby meaning he would have 70% ownership of the new home, and I would have 30% (roughly speaking) - I hope this is making sense!

Is this something that would be reasonable to set up with a mortgage provider? And does anybody have any similar experience of such a situation? Very grateful for any information anyone can offer.

Thanks.

TrickyDicky101

You could do this specifying ownership percentage via holding the property as Tenants in common, however, if the property is to be mortgaged then all owners (ie including your partner) need to be named on the mortgage. Mortgages are join and several so your partner would then become equally liable for the whole of the mortgage.

The other consideration then is that what happens should your much older partner die? You would not immediately take full ownership of the property (as you would if under a joint tenancy ownership structure) so you would be left with your 30% share and the remaining 70% as part of your partner's estate. This may mean that the property has to be sold so that your partner's beneficiaries can inherit.

Thrugelmir

The property would need to be jointly owned and the mortgage in joint names.

The equity injected into the property could be protected by a legal document called a declaration of trust (DOT).

The DOT can specify what ever you wish it to. So you'll need to seek advice independently of each other. As a solicitor cannot give impartial advice to two parties concurrently regarding the same matter.

In addition make sure you have will drafted up.

NewbieRob

Thanks for the very quick reply!

It wouldn't (shouldn't!) be an issue for the mortgage to be in both our names, except that I am looking at a 25 year mortgage, and such a length may raise questions for the lender considering my partners age - would this be an issue?

If it is at all possible, I would fully accept that I would have to sell the property for the sake of the other beneficiaries when he dies, so long of course that I would still take my 30% share. As things stand now, I wouldn't get a penny if he died (except for what he's left to me in his will).

Annisele

The term might be an issue. (If your partner is older than 50 now, then I think it will be an issue - if he's younger, then it depends on the income the two of you can demonstrate).

Would you/your partner be happy with the idea of him leaving you a "life interest" in his house? That would mean you got to live in the house until you died, and then on your death the house would go to his beneficiaries.

NewbieRob

Thanks all for the replies - this is really useful.

My partner is 65. However, the amount I am looking at for the mortgage we are considering could happily be covered by my income alone. Would the lender consider this even though it would have to be in joint names?

I don't think a 'life interest' agreement would be fair to his family, since by the time I die, many of his family will be pretty old too (it's quite an age gap!) - I don't want to be unfair to his family.

PasturesNew

Why not just buy a straight forward place to rent out "until" the future happens. Then you've something that's yours, clearly yours and you chose. Your name, your mortgage, your bolthole.

All other ideas/schemes will have problems and flaws.

NewbieRob

Hi PasturesNew - It's a fair point, and would be preferable - indeed, it is something we have already considered. However, the amount of money I am able to commit couldn't cover the cost of a buy-to-let. The amount for the new property is achievable though.

Annisele

Many lenders have a maximum age of 75. That doesn't necessarily mean that you and your partner can't get a joint 25-year mortgage - you just can't get one with one of those lenders.

However, I do think that you're going to struggle to get a term to age 90 on a residential property. You may also have an issue with your age - presumably you're 50, so you may only have 15-18 years until retirement. Depending on your likely retirement income, quite a few lenders would be unhappy about that.

Could you afford a mortgage over a shorter term? Would you be willing to post some idea of your deposit, your income, and the likely house prices you'd be looking at? I think ultimately the answer is going to be "go talk to a broker", but others may be able to come up with other solutions.