Declaration of Trust & Complications

firstbuyer

Hello looking for some advice here please.

Due to complications with my partners credit file, we have gone with a sole mortgage in my name, and our new build in just my name too.

We were going to have a Declaration of Trust in place due to uneven deposit when it was in joint ownership, however since the change I contacted our Solicitor and asked if we could still have something put into place eventhough my OH will not be on the mortgage.

She has explained in a few words no - its not possible. But she has also said this ...

You are free to contact the mortgage company, either directly or through your broker if you used one, and request consent but you must appreciate that the mortgage company is not obligated to consent and may indeed refuse to consent in which case your partner’s contribution cannot be legally acknowledged and he will in effect be gifting the sum/s in question to you. Please also note that the request may also lead your mortgage company to reconsider the offer that they are making in the first place.

The last sentence is worrying me - even if I don't contact them, which after what she has said I wont be - am I still in a position for them to reconsider if I have my partner living with me?!

Pixie5740

firstbuyer wrote: »

Hello looking for some advice here please.

Due to complications with my partners credit file, we have gone with a sole mortgage in my name, and our new build in just my name too.

We were going to have a Declaration of Trust in place due to uneven deposit when it was in joint ownership, however since the change I contacted our Solicitor and asked if we could still have something put into place eventhough my OH will not be on the mortgage.

She has explained in a few words no - its not possible. But she has also said this ...


The last sentence is worrying me - even if I don't contact them, which after what she has said I wont be - am I still in a position for them to reconsider if I have my partner living with me?!

Is the mortgage lender aware that some of the deposit is coming from your partner who will also be living in the property but not named on the mortgage because that is an issue for many lenders.

Having a mortgage offer is not a cast iron guarantee that the lender will definitely release the funds. There are instances when the offer might be rescinded, for example there was an eejit who posted on the Mortgage & Endowments board who had his offer withdrawn after contacting Nationwide and asking them all sorts of questions about letting the property. Nationwide suspected he might have been trying to purchase a BTL property using a residential mortgage.

kingstreet

Hopefully, whoever arranged this mortgage placed it with a lender willing to accept such cases.

OP - you need to contact them, as this should have been set up as a gifted deposit case as an absolute minimum.

pimento

When we bought our house, both our names were on the mortgage but I was the only earner, my husband earned zero.

I assume it wouldn't be a problem if the 'wife' was a housewife and had no earnings.

Perhaps marriage makes a difference?

eddddy

Your solicitor is probably also representing your mortgage lender, and so may feel duty bound to tell the lender what you've said.

Your partner may have to sign a declaration that their share of the deposit is a gift, which is not repayable, not interest bearing, and they will have no interest in the property you buy.


Obviously, you can choose to give a gift of money back to your partner when you sell the house (which could be equal to a percentage of the properties's value, for example).

But if you choose not to give such a gift when you sell, and keep all the proceeds of the property sale, there will be nothing that your partner can do about it.

firstbuyer

Is the mortgage lender aware that some of the deposit is coming from your partner who will also be living in the property but not named on the mortgage because that is an issue for many lenders.

We have a gifted deposit which the lender is aware of - but that isn't what the solicitor was talking about...

Maybe I should have left out the whole deposit thing from this post or given a bit more context... My solicitor is fully aware of gifted deposit. The person who deals with the declaration is in the same company but different department.

My partner will be contributing towards mortgage / bills etc. This is what she is saying that would be considered a gift and in turn the mortgage company could retract their offer to us if I was to put forward a declaration of trust.

Not sure what other reassurance I can give my partner that I won't leave them down and out with nothing in a worse case scenario! (OH is not pushing for this, but I feel like I need to)

Daverogers_2

Just my two cents here. My partner and I have the same issue. She!!!8217;s got terrible credit. However she!!!8217;s putting down 200k on the house.

Declaration of trust cannot happen here. The bank will not allow her to do this as it would be impossible for the bank to reclaim the home if we was to default. She cannot have a legal claim to the home.

She has had to gift me the deposit. And in two years we will remortgage and put her on it.

firstbuyer

Just my two cents here. My partner and I have the same issue. She!!!8217;s got terrible credit. However she!!!8217;s putting down 200k on the house.

Declaration of trust cannot happen here. The bank will not allow her to do this as it would be impossible for the bank to reclaim the home if we was to default. She cannot have a legal claim to the home.

She has had to gift me the deposit. And in two years we will remortgage and put her on it.

We were going to remortgage in 5 years and put both on as its the only sensible option at the moment. Didn't know if there was anything else. Thank you for some kinda reassurance others go through this too!!

kingstreet

firstbuyer wrote: »

We have a gifted deposit which the lender is aware of - but that isn't what the solicitor was talking about...

Maybe I should have left out the whole deposit thing from this post or given a bit more context... My solicitor is fully aware of gifted deposit. The person who deals with the declaration is in the same company but different department.

My partner will be contributing towards mortgage / bills etc. This is what she is saying that would be considered a gift and in turn the mortgage company could retract their offer to us if I was to put forward a declaration of trust.

Not sure what other reassurance I can give my partner that I won't leave them down and out with nothing in a worse case scenario! (OH is not pushing for this, but I feel like I need to)

You have a gifted deposit from elsewhere, or you understand your partner is gifting part of the deposit to you?

firstbuyer

You have a gifted deposit from elsewhere, or you understand your partner is gifting part of the deposit to you?

I had a gifted deposit from my parents - and after going solo the deposit from OH is classed as a gift too Mortgage / Solicitor fully aware of this.

kingstreet

Ok. The solicitor comment doesn't read as relating to ongoing post-completion contribution to bills etc.

It looks more related to the deed of trust providing your partner with an effective interest in the property; directly contradicting any gifted deposit form signed.