Hes a 'borrower' does he have interest in the property?

confusedfirsttimebuyer

my partner is listed as a borrower on a loan that was taken out to pay off his fathers mortgage.

my partner has paid towards this loan, this loan is now paid off. we tried for a decision in principle with him as a first time buyer but the credit check came back that he was a mortgage payer.

Land registry say he isn't on the deeds and isn't a full or partial owner. Bank the loan was taken out with say he shouldn't have a problem and HMRC say it looks good but he needs to prove he doesn't have interest in it!

the stamp duty advisors charge £305 an hour, can they give us confirmation? Thats significant enough for it to change his credit check?!

Any advice? help

Pixie5740

confusedfirsttimebuyer wrote: »

my partner is listed as a borrower on a loan that was taken out to pay off his fathers mortgage.

my partner has paid towards this loan, this loan is now paid off. we tried for a decision in principle with him as a first time buyer but the credit check came back that he was a mortgage payer.

Land registry say he isn't on the deeds and isn't a full or partial owner. Bank the loan was taken out with say he shouldn't have a problem and HMRC say it looks good but he needs to prove he doesn't have interest in it!

What kind of loan are you talking about? A personal loan? A mortgage? Does your partner or his father have any paperwork relating to the loan? Can your partner find details about the loan by checking his credit files?

Was there ever a Declaration of Trust drawn up regarding the loan and/or property?

confusedfirsttimebuyer wrote: »

the stamp duty advisors charge £305 an hour, can they give us confirmation? Thats significant enough for it to change his credit check?!

Any advice? help

How the mortgage lender define a first time buyer and how HMRC define a first time buyer are not necessarily the same.

HMRC have produced guidance on who counts as a FTB for SDLT purposes. Does your partner fit the criteria?

How a mortgage lender chooses to define a FTB is up to them. Does your partner have to have a FTB mortgage and with the lender in question?

confusedfirsttimebuyer

He doesn't have access to a lot of the paperwork. he has a letter from June where they're updating the balance and have a breakdown of who are the mortgagors and the borrowers (he's only a borrower). This letter has the mortgage that its associated withs number on the top corner. It also refers to the mortgage further on in the letter ''if you liked to discuss this letter or your anything to do with your mortgage please calll this number''

this started when he was young. he has no memory of what he did or didn't sign unfortunately.

The main issue is stamp duty to be honest. we hadn't budgeted for another 5k in stamp duty.
we also have first time buyer bank accounts that we can claim on from the government.

If he isn't able to claim on his bank accounts thats fine I still can we just want to be cleared for stamp duty tax relief.

confusedfirsttimebuyer

do we even need a specialist stamp duty advisor to tell us or can we just crack on with our regular solicitor and show them the paper work?

kingstreet

Is it one of the annoying HSBC A2 charges? The mortgagor and borrower things rings a bell, despite the "book" answer being they should be one and the same...

In which case he can be a borrower and party to the mortgage without having any interest in the property. We used to call this being a guarantor not so long ago. It's now referred to as "joint borrower, sole proprietor."

What's the issue here? A reduction in his borrowing power, or unexpected liability for SDLT?

if the latter, download a copy of the Proprietorship Register for the property from the Land Registry and if he isn't named there he should be able to convince a solicitor he is merely a guarantor and has no legal or beneficial interest in the property.

getmore4less

Land reg only have legal ownership, not beneficial ownership.

If it was that easy anyone could do it to save SDLT on their second home.

kingstreet

getmore4less wrote: »

Land reg only have legal ownership, not beneficial ownership.

That's why I said use it "to convince" rather than use it to prove!

SmashedAvacado

From the SDLT guidance:

Example – parental help
Mr and Mrs M are helping their son buy his first property by providing the deposit for a flat which will be his main residence. Mr and Mrs M currently own just one property, the family home. Due to the bank’s lending criteria they require Mrs and Mrs M to be a party to the mortgage and be on the deeds of the property. On the same day as the purchase a deed will be executed which will provide that Mr and Mrs M have no interest in the property and that their son has full beneficial interest in the property.

If you are not even an owner, just someone liable to pay the debt, i cannot see how you would be consider an owner for the purposes of SDLT. whether the bank consider you a first time buyer for other purposes will depend on how they define it - but you don't have a legal or beneficial interest in the property (you are just paying a debt that relates to a property), so i would be surprised if it was the case that they considered that you did.

confusedfirsttimebuyer

how do you prove beneficial ownership then?