Adding Person to Mortgage And/Or Deeds - Pros and Cons

jimjames

Hopefully someone may have some pointers for me to consider before I speak to my solicitor to make arrangements.

I want to add my 19 year old son to the BTL mortgage on a rental property so that he can use the rental income to cover his university fees. The bank have agreed and there are 2 options, to just add him to the mortgage or to also add him to the deeds as well. The mortgage is under £125k so I don't believe that stamp duty is due on his addition to the mortgage.

I thought it would be easier to just have on the mortgage which will avoid the cost of changing the deeds but is there a downside to this? Has anyone else done similar or got anything we'd need to consider as part of it?

davidmcn

Adding him to deeds means he loses his first-time buyer virginity (assuming he doesn't already own anything else) for SDLT etc, and any future purchase would attract the 3% additional dwelling supplement for SDLT.

Adding him to mortgage would affect his affordability for any future purchase.

Does he actually want/understand the liability at this stage in his life?

You could just give him the money from your income?

kingstreet

Adding him to the mortgage alone makes him responsible for a debt on a property in which he has no stake and therefore the income from it would not be his.

He should get independent financial and legal advice.

jimjames

davidmcn wrote: »

Does he actually want/understand the liability at this stage in his life?

You could just give him the money from your income?

Thanks. If it's from our income it's taxed at 40%, if he receives the income then it uses his personal allowance.

kingstreet wrote: »

Adding him to the mortgage alone makes him responsible for a debt on a property in which he has no stake and therefore the income from it would not be his.

He should get independent financial and legal advice.

That's really good to know, thanks.