Secured Loan - is ours valid?

wolfchick

Hi

My partner & I took out a secured loan with Picture earlier this year. Thing is it's secured in our joint name against the house, whereas the house & mortgage is in his name only...

Our recently acquired Financial Advisor has expressed amazement that they have done this, we are now looking at sorting affairs out to lose the loan against the mortgage and are just wondering whether this factor in the agreement has any bearing on things?

Cheers!

Emmzi

You might have grounds if the house and mortgage were in joint names and he'd taken out a loan withut your knowledge.. but while this is unprofessional, the house owner is fully aware of what has happened - so on balance I'd say the loan stands. It'd be very unlikely to be written off on a technicality!

jonesMUFCforever

Emmzi wrote: »

You might have grounds if the house and mortgage were in joint names and he'd taken out a loan withut your knowledge.. but while this is unprofessional, the house owner is fully aware of what has happened - so on balance I'd say the loan stands. It'd be very unlikely to be written off on a technicality!

Whilst I agree that OP cannot get out of repaying the loan but I would be amazed if the legal charge on the property can be enforced.
Picture might not want to read this but their security could be worthless.

If OP want to use this to their advantage ie in getting off early settlement fees etc if they want to re mortgage - I would drop them a line asking for their opinion!

Debt_Free_Chick

Just adding to the debate here, as I'm not sure of the answer ....

I think Picture might have been a bit clever here.

Firstly, if Wolfchick has or acquires a beneficial interest in the property, then - should the charge have to be enforced - the whole amount of the outstanding Picture loan could be claimed from her share of the equity.

If she doesn't, the the whole amount could be claimed from her partner's equity in the property - which is the position that would have applied had the loan been in his name only. But they have given themselves the option to take repayment from her share too (if she has any)!

Plausible?

Butlers1982

Yes its perfectly legal.

As long as the owner of the deeds of the property is one of the party then it is legally binding. Im presuming the reason that its in both names is possibly due to income not being enough for the one person?
At the end of the day, if they default, its against the property so only the homeowner could loose out-other than defaulting credit by the second person