Can I go on the deeds but not on the mortgage?

legseleven192000

Hi. Nothing has been signed yet. Or completed. We are at the stage of registering the land just before completing

Tom99

legseleven192000 wrote: »

Hi. Nothing has been signed yet. Or completed. We are at the stage of registering the land just before completing

[FONT=Verdana, sans-serif]Your solicitor registers the transfer after completion not before. Who is the buyer on the contract and transfer documents, you, your relative or both of you?[/FONT]

legseleven192000

Yes only the relative is the buyer. We will have no.beneficial interest. The solicitor has asked the question to land registry and their response is as above discussed. Didn't realise at what stage it was done. She must be enquiring ready to complete then. But their response and the problem stands.

davidmcn

Is it something as simple as your solicitor looking at the wrong format of document ie a standard owner = borrower one? HSBC presumably use a special style for these types of mortgage.

getmore4less

legseleven192000 wrote: »

Yes only the relative is the buyer. We will have no.beneficial interest. The solicitor has asked the question to land registry and their response is as above discussed. Didn't realise at what stage it was done. She must be enquiring ready to complete then. But their response and the problem stands.

That's going to leave you with PET for the full mortgage amount.

What are the terms of the mortgage if you die?

SDLT_Geek

It seems to me that confusion is being caused by mixing up two distinct elements, calling them both a "mortgage". Let us separate them and things become much clearer:

(a) When a member of the public says they are getting a mortgage, they usually mean they are getting a secured loan. They are becoming borrowers and will owe money to a Bank or Building Society.

(b) As security for that loan the lender gets a legal charge (also called a mortgage), this is often against the home of the borrower, but it does not have to be. That security / legal charge has to be given by all of the legal owners of the property (as registered at the Land Registry) in order to be effective and give the lender a power of sale.

HSBC are prepared to lend money to borrowers who are not identical people to the owners. So the registered proprietors (legal owners) of the property might be A and B. HSBC might agree to lend money to A alone. A is the sole borrower. But HSBC require the security / legal charge to be given by A and B.

The Land Registry are quite right to say that a legal charge entered into by A is not valid if A and B are the registered proprietors. The legal charge to be effective must be both A and B.

So yes, the loan agreement (and mortgage loan offer) can be to A alone, but the legal charge needs to be by A and B.

There are some explanatory notes by HSBC of 29 October 2017. Here is a link: https://www.lmsuk.com/ConveyancerZone/Pages/Download.aspx?dem_id=290839 And here is an extract which makes thinks clear when you understand that:

1. the "Mortgagor" is the owner / registered proprietor of the property who enters the legal charge to give security, in our example A and B
2. the "Borrower" is the person who will owe the money to the HSBC and in our example is A alone.

How to complete the A2e Mortgage Deed correctly:

1. Complete the Mortgagor box with the full name(s) of the owner(s) of the Property

2. Complete the Borrower box with the full name(s) of the Borrower(s) set out in the Offer

3. Complete the Property address in section 1 and if known, the title number

4. Ensure all owners sign the same Mortgage Deed. The deed has spaces for up to four
property owners. Please ignore any unused signature spaces. Ensure all signature(s) are
witnessed and witness details given (in legible form)

5. Remember to date the Mortgage Deed

SDLT_Geek

legseleven192000 wrote: »

Yes only the relative is the buyer. We will have no.beneficial interest. The solicitor has asked the question to land registry and their response is as above discussed. Didn't realise at what stage it was done. She must be enquiring ready to complete then. But their response and the problem stands.

So to follow on from my previous posting you appear (if I understand the position correctly) to have a position where your relative A is to be the sole owner of the property in all senses. She is to be the sole registered proprietor at the Land Registry and the sole beneficial owner. You (B and C) are to have no share in the property, but are to be the borrowers for a loan from HSBC.

If everyone is comfortable with this structure then the loan agreement is between HSBC as lender and B and C as borrowers. A as owner has to grant HSBC security / a legal charge on the house (a third party legal charge) so that HSBC can exercise their power of sale over the house if the loan is not paid.

If HSBC changed their minds and said B and C must also go on the title then you would have a situation where B and C stand as borrowers still, but the legal charge would have to be granted by A B and C. So long as HSBC agreed, you could have a declaration of trust by A B and C as the legal owners confirming that they hold the house on trust for A alone. As stamp duty land tax looks past bare legal ownership to the underlying beneficial ownership then A alone would be treated as the purchaser for SDLT and the other property owned by B and C would not cause the higher rates of SDLT to be due.

legseleven192000

Mortgage is for a decently small amount, and we have life insurance to cover both ours and this one. So thats ok, we wont be leaving the relative high and dry. Interesting posts from SDLT Geek. You done this before? LOL. In your first post you talk about:

So yes, the loan agreement (and mortgage loan offer) can be to A alone, but the legal charge needs to be by A and B.

In the next post you say its possible for the HSBC side, which confirms what we thought, and they said before to us. There is no way A can go on the mortgage with HSBC, does that still make what you are saying possible? Little confusing for a novice. So what is the part of the stamp duty payable, is it sat with land registry or is it somewhere else in the line of purchase? I thought land registry determined the stamp duty payable, and as A and B or A,B and C have to go on the legal charge and also going on the mortgage, doenst that mean its payable for 2nd home considering B and C have a house.? Sorry, its all mind boggling!

getmore4less

looks like your solicitor forgot to put your relative(legal owner) on the charge.

SDLT_Geek

legseleven192000 wrote: »

. There is no way A can go on the mortgage with HSBC, does that still make what you are saying possible?

What is there to stop A as full legal and beneficial owner of the property from giving HSBC security over the property?