Can 3 people have the same mortgage?

Debtfree1014

HI,

Pretty straight forward question. Myself & my wife are weighing up our options for buying a house. The straight forward idea is using a 10/15% deposit and buying one for around £250,000.

The other option that is a little more obscure is my father in-law is selling his house and will look to make around £150,000, could he then 'give' us that as a deposit, and together as a trio, buy a house in the region of £400,000 plus?

Any advice would be great.

Thanks in advance!

dc197

Can you elaborate on the quotation marks around the word "give" please?
Do you mean it's not really a gift at all, but a loan?

Debtfree1014

Yes, if he sells and gets £150,000 for his house and then gives it to us, or even uses it himself to apply for out three way mortgage would this be ok to count as the deposit?

pinkteapot

If all three of you were on the mortgage and deeds then he wouldn't have to give you anything. The three of you would be joint purchasers, jointly responsible for paying the mortgage, and jointly putting down £150k as a deposit.

There are some mortgages that allow three names instead of one/two, but usually when you're all living in the house (eg three friends buying together). Will your father-in-law be living in the house with you?

How old is father-in-law and does he work? He'd be evaluated like any other mortgage applicant. He also needs to be aware that he'd be responsible for the mortgage payments if you failed to pay.

booksurr

given the title of your thread do you really mean:
- FIL will go on the mortgage with you so 3 people in total
and
- FIL will put money into the property as his share of the deposit and will be a named owner (the lender will insist on that given they do not allow people to contribute to deposits unless it is a documented non returnable gift)

is FIL going to live in the property? if not then it is a bad idea as it exposes him to Capital Gains tax and exposes all of you to the higher rate stamp duty on purchase since it will not a be replacement home for him

Debtfree1014

Sorry should have made it clearer, yes my father in law would be living with us in the house. He's only 52. But the idea is, if he pays say £150,000 for a deposit, on lets say a £450,000 house, myself and my wife would also pay £150,000 each i.e the remaining mortgage after the deposit would be £300,000.

Would this be something that would easily work?

G_M

* if the house is jointly owned by all 3 then the 3 of you can apply for a mortgage
* the mortgage lender will apply usual criteria in assessing you all - there may be an age issue. How old is he?
* you can own as 'Tenants in Common' and have a separate Deed drawn up to show who owns what % of the property
* but you would be wise to consider, agree, and put in writing what would happen if:

a) one of you wanted to sell
b) you divorced and had to sell
c) you divrced and one of you moved a new partner in
d) one of you lost their job and rhe mortage became an issue - would all 3 become homeless
e) FIL left his share in his will to someone else (his wife? new partner etc) and they wanted to either move in, or sell.
d) FIL went into a care home and needed the money from the house
e) FIL re-married and wanted o move new wife in. Or sell and buy new home with new wife

Consider every possible scenarion, however unlikely. That way you reduce arguements/problems later