help for morage

bags0784

can i put a friends name on a morgage to ensure i would be accepted but have a legal document written which ensures she wouldn't be responsible for payments? i will take out life insurance to ensure if any critical illness the morgage would be covered. The friend has paid her morgage off and would be on mine just for the sole purpose of securing one. I know they would be on the deeds initially but could look at a transfer of equity when a majority of the morgage has been paid?

G_M

Yes, but whilst it would be legally binding between you and her, it would not be binding between her and the mortgage lender.

So if, for example, you got into arrears, the lender could demand payment from her - that is the whole point of her name Being on the mortgage!

She could then sue you, on the basis of the Deed you had set up, and demand that you repay her.

bags0784

so god forbid that happened could i have legal document drafted to say i would sell and repay her any money due? thanks for your help

Cakeguts

bags0784 wrote: »

so god forbid that happened could i have legal document drafted to say i would sell and repay her any money due? thanks for your help

What would you do if the property had dropped in value and you owned her more money than the house was worth?

G_M

Yes, but it would not change much.

If you failed to repay her, either way she'd have to sue you to enforce the Deed.

Meanwhile the lender would still be chasing both you, and her. And her credit rating could suffer just as yours could.

The bottom line is that if she's on the mortgage she's liablefor full payment of that mortgage - just as much as you would be.

And don't forget she'd also need to be on the property Title, and jointly own the house with you.

That means if she later bought a house for herself, she'd be buying a 2nd property and have to pay additional SDLT. Or if she already owns a property, then you and she would have to pay additional SDLT on this property you buy together.

robatwork

From the bank's perspective the whole point of her being on the mortgage is that they can force her to pay if you are unable or unwilling.

This is a bad idea for you mother, father or child. Even if you have a disagreement, they are still your relative. It's a really bad idea for your friend. What if you aren't friends in 1/5/10 years? It does happen, and could be huge mess.