How to protect money invested in our daughters new house - in her husbands name

Cnort1

Our Daughter and new Son in Law currently live in a house owned by us. One day we intended to leave it to her or the equivalent sum in our wills.
She is now married with a child and they want to move home, we have agreed to sell the original house and for them to use the equity (£145k) as a payment towards the new home. He is working and has a mortgage offer.
She is a stay at home mum and so cannot go on the mortgage as the lender (Halifax) will then lower the amount which means they can’t afford the house.
With me so far??? So, they are buying the house £270k, with our £145k and a mortgage in his name for the balance. Halifax won’t let us go on the house deeds as owning part of the house. Nor will they let our daughter.
They say they will only allow the mortgagee to go on the house deeds.
So we have consulted a solicitor who has suggested a declaration of trust, effectively adding a ‘charge’ to the house so if it is sold we get our money back (or more to the point our daughters if anything has gone wrong) again the Halifax are refusing this.
The best the solicitor can now come up with is for us to have an official loan agreement with him.
Clearly he can then sell the house, disappear with the money, or claim he hasn’t got it, or worse and we have to chase him through the courts to get it. If he doesn’t have it we’ll never get it back.
Moral dilemma of course if how much do we trust him. Realistically I would like to. But £145k is a lot of money to hand over to a non blood family member given how things can quickly go wrong.
Help!
Ideally we want to have some form of control or give our daughter the money and she have this. Halifax seem unwilling to do anything to this effect (as of course should he default they want the quickest possible way to get their money with no interference)

Any suggestions welcome and very gratefully received!!

davidmcn

Cnort1 wrote: »

Ideally we want to have some form of control or give our daughter the money

I think you first need to decide which of these options you actually want.

Your daughter has a good amount of legal control given that she's in a marriage. Realistically your son-in-law can't just kick her out, sell the house and disappear with the cash.

ladybabe

well if they are married she has some protection but surely the best thing to do would be add her to the mortgage and then look at something cheaper, knowing that when she can return to work they can sell and buy at the level they wish for when kids are older

minimike2

Why does the mortgage have to be with Halifax?

I would be looking to a lender who would allow the lending in joint names. There is potential for the case to be a joint proprietor sole borrower (AFAIK still only available from one lender and it isn't the Halifax).

Also I don't really buy the fact that she can't go on the mortgage due to her affecting affordability, because if she isn't on as a borrower and she is reliant on his income, then she should have been named as a dependant in the application - I am not too hot on how Halifax assess affordability these days but I would imagine it having a pretty similar impact - Unless he is committing fraud and not declaring her as a dependant.

Also if a loan agreement is created then Halifax will not agree the mortgage anyway, as I am pretty sure they do not allow loaned deposits.

Nebulous2

I'd agree that a lot of your issues seem to be flowing from the Halifax. You need to work out what you want to do, take that to an independent broker and ask them to source a mortgage which suits.

Instead you have settled on the Halifax and are trying to hammer your round peg into the square hole they have presented you with.

haras_nosirrah

There is a high street lender who allows a loan as source of deposit and will allow a charge to be put onto the property in your favour. If you sign it off as a gift it is something he can show in the future if he tried to take the money as you have signed a legal document gifting the money to him. Halifax is not the lender that will make what you want to happen happen

ACG

Other than maybe affordability, there is no reason why your daughter can not go on the mortgage/deeds with halifax. Not working is not a reason to not go on there.

You could also potentially look at doing a Deed of Trust on the property.

But as Horas says, there is a lender who will allow a loan as a deposit which is payable if/when the property is sold.

firstbuyer

I was told by my solicitor that if my partner wasn't on the mortgage and therefore not on the deeds then I couldn't have a declaration of trust (In theory I could but it could jeopardise our mortgage offer as the lender we have has strict rules around this)

AnotherJoe

So we have consulted a solicitor who has suggested a declaration of trust, effectively adding a charge to the house so if it is sold we get our money back (or more to the point our daughters if anything has gone wrong) again the Halifax are refusing this.

This is what i have, a second charge on the house and a loan agreement with daughter.

Not though with Halifax.
Original mortgage was with Santander, new one (they remortgaged) with Nationwide.

foxy-stoat

You need to loan your daughter the £145K with an agreement and second charge on the property to fully protect the money - not sure if a lender will agree to this where the whole deposit is a loan.

Flugelhorn

I would look at other lenders - I know the rules have changed but seems crazy that you can borrow one amount on your own with dependents, but less if a second person is named on the mortgage. Same outgoings surely?