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

legseleven192000

(a) Does A have capital to put in? A HAS A HOUSE ALREADY THAT IS TO THE VALUE OF AROUND 75% OF THE VALUE OF THE HOUSE BEING PURCHASED
(b) Are B and C providing capital towards the purchase? WE ARE PROVIDING A 25% MORTGAGE TO MAKE UP THE DIFFERENCE
(c) Is so, is that by way of gift as A is to be sole owner? WE ARE NOT GIFTING, HENSE THIS ISSUE. WE ARE DOING INDIRECT SECURITY ON THE PROPERTY, SO A IS TO BE THE SOLE OWNER YES
(d) So B and C are borrowing the money from HSBC and C is not to be a borrower. But who will make the repayments in practice? Do B and C expect to pay the money out of their own resources or will A meet all or some of them / reimburse B and C. B AND C WILL BE BOTH PAYING BACK THE MORTGAGE, B AND C IS TO BE A BORROWER. A WILL NOT BE PAYING BACK B AND C.
(e) Any idea why HSBC refer to B and C as the depositors?? B ANC C ARE DEPOSITING THE MONEY TO HSBC TO PAY FOR THE MORTGAGE AS MY LIMITED LEGAL UNDERSTANDING READS INTO IT AS SO.
(f) Any idea why HSBC refer to A as the consentor?? A IS CONSENTING TO ALLOW BE AND C TO PAY INTO THE MORTGAGE THUS THE HOUSE BUT NOT BE ON THE TITLE
(g) Will it just be A living in the house? YES
(h) Where does A live now? With B and C NO, HAS THEIR OWN HOUSE TO SELL
(I) Has there been a requirement that A take independent advice? YES, TRYING TO DO THIS NOW. HSBC REQUIRE THIS AS PART OF THE MORTGAGE TERMS

Isnt there the loose term of the word borrower still involved here as the land registry said? A will be a borrower on the terms of the mortgage thus allowing the land registry to happen correctly with the statement below being applicable??
The key is Registered Proprietor = Borrower (plus others if needed) who then 'charges the property'
OR
Is the term borrower actually meaning specifically borrowing money to pay for the mortgage, which A is not. Yet they are on the mortgage terms. if you are correct as per below comment, this makes her a Mortgager, not a borrower?
B and C are providing the extra money for A to buy the property, not the other way around as it is in a lot of cases. She is our mother in law, but often it is the parents providing help to the children , this case is reversed, we are helping her. yet she holds most of the money for the purchase.
The terms on the letter from HSBC are as they sent to us, i didnt understand it either to be honest thats why I didnt include it earlier in this thread, and it is what confused the solicitor in the first place. I typed it word for word on here. But they absolutely state that this letter explains and covers Land registry allowing this purchase to take place. They say it has been done this way before and there should be no problem

Are B and C providing the deposit / cash / equity to A for the property to be bought as well as agreeing to be liable to HSBC for the loan? Or does "depositor" mean something else? That B and C have money deposited with HSBC which is taken into account too? YES TO THE FIRST BIT BUT IN THE FORM OF A MORTGAGE NOT CASH. NO TO THE 2ND BIT, WE DONT HAVE CASH WITH HSBC.

But I thought we had established that the "borrowers" (the people who borrow the money from HSBC and who HSBC could claim the money from) are B and C only, with A not being liable for the loan, but just putting up the security. Is that right still? YES STILL CORRECT, BUT THE WORD "BORROWER" IS IN QUESTION. IF LAND REG SAY A PROPRIETOR MUST BE A BORROWER THIS GOES BACK TO WHETHER WE CAN EVEN DO THIS, AND HOW CAN HSBC BE WRONG AS A CAN NOT GO ON THE MORTGAGE AS BEING LIABLE FOR THE LOAN. SO IT STARTS OVER, WHY WOULD WE HAVE BEEN GRANTED IT BY HSBC IN THE FIRST PLACE?

getmore4less

(c) Is so, is that by way of gift as A is to be sole owner?

WE ARE NOT GIFTING, HENSE THIS ISSUE. WE ARE DOING INDIRECT SECURITY ON THE PROPERTY, SO A IS TO BE THE SOLE OWNER YES

if you are borrowing the money to give them to buy the house then that's a gift and the usual IHT issues of a PET apply.

getmore4less

But I thought we had established that the "borrowers" (the people who borrow the money from HSBC and who HSBC could claim the money from) are B and C only, with A not being liable for the loan

what practical difference does it make?

If the mortgage does not get paid they take the house to pay off the debt, that makes A more liable as that is easier for the lender than trying to take legal action against the borrowers.

SDLT_Geek

legseleven192000 wrote: »

Is the term borrower actually meaning specifically borrowing money to pay for the mortgage, which A is not. Yet they are on the mortgage terms. if you are correct as per below comment, this makes her a Mortgager, not a borrower?
Correct, that is how I analyse what you have been saying throughout. A is not a borrower but she is a mortgagor as the intended registered proprietor of the property.

BUT THE WORD "BORROWER" IS IN QUESTION. IF LAND REG SAY A PROPRIETOR MUST BE A BORROWER THIS GOES BACK TO WHETHER WE CAN EVEN DO THIS, AND HOW CAN HSBC BE WRONG AS A CAN NOT GO ON THE MORTGAGE AS BEING LIABLE FOR THE LOAN. SO IT STARTS OVER, WHY WOULD WE HAVE BEEN GRANTED IT BY HSBC IN THE FIRST PLACE?

I do not read the Land Registry as saying that the registered proprietor of a property has to be a borrower. Although third party mortgages are not that common for residential properties, the Land Registry understand them and will register a legal charge / mortgage deed as security against a property so long as the registered proprietor is a party to the legal charge / mortgage deed and there is the appropriate wording by which the property is charged. This is whether or not that same person is a borrower.

legseleven192000

So in the end, it turns out it was as simple as getting the A2E form to the Land Registry to confirm all was acceptable to do the mortgage and house deeds the way we wanted to. The LR did say that it was rare, and we have determined that the original question sent to them with the wording ambiguous is what has caused the confusion. The wording needs to be Mortgager and Borrowers separately. Calling all 3 people borrowers is what threw it, amongst other things.
Thanks everyone for all your help, and it appears this A2E form works for a variety of rare and different to the norm mortgages, so persevere if you get into troubles with your Solicitor understanding what you are trying to do. The only other thing is that we did need independent legal advice and it couldn't be from our solicitors office, so that delayed even further trying to explain it all again to another solicitor. So get that in place early.

SDLT_Geek

Legseleven192000, did all of this get registered alright in the end?

money_talks

Hi all, very interesting thread. Not sure I 100% understood everything that has been said, but I'm in a very similar position, only that I already have a mortgage with HSBC for property A, and would like to gift it to my mother with her becoming the only mortgagor and myself becoming the only borrower.
I spoke to HSBC twice about this and the people I spoke to advised that I would have to go on the deeds. I've clarified that I'd be going on the mortgage deeds as the borrower but not the mortgagor, but they insist that this is not possible. I think they might be a misunderstanding or I misunderstood this thread.

legseleven192000, please could you provide a recommendation for your solicitor? also do you have a contact at HSBC who was advising you that this is possible?

Any help from anyone would be greatly appreciated! Please let me know if I should start a new thread and/or provide a bit more of a background.

SDLT_Geek

It is legally possible to have a type of mortgage, often called a “third party mortgage” which does what you want. The borrower (who owes the money) is a different person from the mortgagor who owns the property and who gives the bank the security over the property.

These arrangements are rare though for residential mortgages.