2 mortgages on 1 property

MC56

Hi guys wonder if someone can point me in the right direction.
Due to family difficulties (aren't they always) my step daughter and her partner are in the process of buying a £200k house together, however one of them has £70k to put as a deposit and the other has £30k but because of parental pressure they want to protect each others deposits just in case the worse happens and they split. I'm pretty sure you can't have 2 mortgages on 1 property but is there another way around this e.g. shared ownership for instance
Anyone!

bravesocks

Hi MC
I tried to get a number of banks to place two mortgages on one property but they all refused, I personally think that it would be a great way ahead for the banks and their customers but we will have to wait and see, it might happen one day but its all down to the legalities of it.

You can protect individual interests in property purchasing with another person but it must be done through solicitors, each person involved has to get a different solicitor and between them they draw up a deed of trust, this deed will outline all interests and when and if the property is sold then the conditions are brought into play.

Ive done it and it worked fine, good luck !

MC56

Thanks Bravesocks will look into that

MortgagesInc

The main issue would be what would happen if one party didn't pay their mortgage - they couldn't reposses half the house. That's why you can't get two mortgages on there.

As bravesocks suggests, it is relatively straight forward and becoming more and more common for solicitors to draw up agreements between parties where there are inequalities in the deposit, and it is legally binding, so protects both parties. They can specify what proportion of any increase in equity goes to who - pretty much state whatever they want.

Dan_Collins_2

MortgagesInc wrote: »

The main issue would be what would happen if one party didn't pay their mortgage - they couldn't reposses half the house. That's why you can't get two mortgages on there.

As bravesocks suggests, it is relatively straight forward and becoming more and more common for solicitors to draw up agreements between parties where there are inequalities in the deposit, and it is legally binding, so protects both parties. They can specify what proportion of any increase in equity goes to who - pretty much state whatever they want.

Good post.

I will add - This should be simple, talk to the solicitor about putting the tenancy in common rather than joint. You will need to sit down and work out the % but it is a simple way of doing it. Makes sense these days. I have a lot of London client buying with mates, same thing really.

cottagelady

:T Just the help I've been looking for
We need more room, my working 22 year old daughter would like to get on the property ladder but can not afford if on her own. I'm a working widow so don't want to increase my ourgoings. We have thought about buying a bigger place, sharing the mortgage and then when it's time move on, say in 5 years, she can have a share of the property value. We realise we'd have to work out the figures and agree a percentage but it seems the ideal solution. Are we missing any pitfalls?

Welsh_Rarebit_2

bravesocks wrote: »

You can protect individual interests in property purchasing with another person but it must be done through solicitors, each person involved has to get a different solicitor and between them they draw up a deed of trust, this deed will outline all interests and when and if the property is sold then the conditions are brought into play.

A deed of trust is not sufficient to protect an individual. It is essential for each partner to also register their interest at the land registry office. Otherwise an unscrupulous partner could sell a property that was registered solely in his or her name and 'do a runner'.

Although a deed of trust is legally binding, it can't prevent you from becoming a victim of fraud. Not everyone you deal with can be trusted to adhere to a legal agreement. You must anticipate that a dishonest partner will also be devious!

WR

MortgagesInc

I think the property will be in joint names Welsh, they would just draw up a deed stating their different % shares of the property - that's my understanding anyway