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Mortgage - Declaration of Trust
Ben_Pitman
Posts: 3 Newbie
Hi All,
Any help with the below is greatly appreciated!
So me and my wife are attempting to buy a house with my mother in law. The idea is that she will sell her house and 'gift' us £200,000 and we will purchase a £400,000 house where all of us will live together. She will then in theory own half of the house
We had the mortgage in principal already to go and we went to a solicitors that requires us to sign a declaration of trust to protect my mother in laws interest, that's all fine. However after reading online I'm now nervous that this now changes our agreement with the lender?
Do we need to declare to the lender that we are signing a declaration of trust? As I've heard differing opinions of - its a contract between the beneficiaries and not a concern to lender, and we need to tell the lender and this could affect the mortgage application.
Any help with understanding all of this is really appreciated
Ben
Any help with the below is greatly appreciated!
So me and my wife are attempting to buy a house with my mother in law. The idea is that she will sell her house and 'gift' us £200,000 and we will purchase a £400,000 house where all of us will live together. She will then in theory own half of the house
We had the mortgage in principal already to go and we went to a solicitors that requires us to sign a declaration of trust to protect my mother in laws interest, that's all fine. However after reading online I'm now nervous that this now changes our agreement with the lender?
Do we need to declare to the lender that we are signing a declaration of trust? As I've heard differing opinions of - its a contract between the beneficiaries and not a concern to lender, and we need to tell the lender and this could affect the mortgage application.
Any help with understanding all of this is really appreciated
Ben
0
Comments
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Have you told your lender that the £200k is coming from your MiL and that she's going to be living in the house? It doesn't meet the usual no-strings-attached requirements of a gifted deposit if she's going to have an interest in the property.0
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So we made our mortgage advisor aware that she would be living with us, and he didn’t seem to have an issue with that, and went about getting us an agreement in principal0
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Living there is a small problem
Owing 1/2 the house is more of a problem as it is no longer a gift.0 -
Does anyone know how to get round this? I looked into joint mortgages but lenders will only give a term length subject to the oldest on the agreement, in this case 60 so a maximum of 15 years which makes the payments unplayable for us0
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She gives you a loan of £200k with a charge against the house. Term of the loan is it's repayable when the house is sold. That might work. I have the same with my daughter. However I don't live in the house which might make a difference. . Only a few mortgage companies are OK with this, the two she has used are Santander and Nationwide.
Edit in fact I think I had to sign a document saying I would NOT live in the house. .0
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