Mortgage with joint ownership

Custom24

Hi
My mother-in-law (MIL), my wife and I are buying a house together.  We will all live together and share the ownership of the house (50% MIL, and 50% me and wife).
My MIL is contributing just over half of the purchase price in cash.  This is also going to be my wife's inheritance when MIL passes.
The remainder will come from a mortgage of wife and I.  We already have approval in principle.
However, I made the application for approval in principal based on us having a deposit of over 50%, because I considered the MIL's funds to be our deposit.
Now I am wondering if the bank will see it this way when we apply for the mortgage for real.
The bank will surely care that there is another interest in the house, but I am not sure how they will deal with that.  I want to believe it will be OK as long as they get some legal document signed by my MIL meaning that they have priority over recovering funds first if we default on the mortgage and they have to repossess and sell the house?
Will that be the case, or is there something I haven't thought of here?  Will they just turn down the mortgage because we don't really have this deposit?
I don't know if this helps or makes it more complicated, but our current house (no mortgage) we are planning to sell after we've bought this new house, so we do have additional security possible for the loan.  I'd prefer to keep that out of it, though, if possible.  The vendor chose us because we don't have a chain, as long as we can sell our current house afterwards.
Thanks for any advice
Mark

getmore4less

Second home SDLT to pay.

Do you have a broker working on this? 
A lender that does joint proprietor sole mortgage lending would have been one route to go down.
You should have included the MIL from the start your current AIP may be useless  which lender?

Custom24

getmore4less said:

Second home SDLT to pay.

Do you have a broker working on this? 
A lender that does joint proprietor sole mortgage lending would have been one route to go down.
You should have included the MIL from the start your current AIP may be useless  which lender?

SDLT will be reclaimed when we sell current house.
I do not have a broker but will seek one.  Any recommendations?
"Included the MIL from the start" - I don't know what you mean here.  The AIP process for my bank (Barclays) just asked the purchase price of the house and how much money we wanted to borrow.  It didn't ask where the funds we have are coming from, as far as I remember, and didn't ask about other interests in the property either, again as far as I remember.

[Deleted User]

Is you Mil going on the mortgage?  She's unlikely to be allowed on the deeds as an owner without going on the mortgage as well.

So are you getting a 3 person mortgage? And then setting ownership up as tenants in common?

If not then you need a lender who allows part of the deposit to come from someone living at the property but not named on the mortgage.   Not all of them do allow this. 

Custom24

Deleted_User said:

Is you Mil going on the mortgage?  She's unlikely to be allowed on the deeds as an owner without going on the mortgage as well.

So are you getting a 3 person mortgage? And then setting ownership up as tenants in common?

If not then you need a lender who allows part of the deposit to come from someone living at the property but not named on the mortgage.   Not all of them do allow this. 

We want ownership in common.
It feels like the best thing to do is to go for the AIP again, but this time put the MIL on the mortgage.  She's 74, though, and I was looking at a mortgage over 19 years.  So I'm not sure if she really can be on the mortgage.  I am the only one of the 3 with an income, if that makes any difference (i.e. the AIP was approved based on my income and affordability alone).

[Deleted User]

There are lenders who have no upper age limits as long as not using MiL income for the application.   So it sounds perfectly doable (without knowing the finer details obviously).   

Just something to keep in mind, are there any other siblings? The value of MiL share will be taken in to account when settling her estate on death so unless you want to sell the house to pay any other inheritances then you need to think about the logistics of settling any other inheritances due

Custom24

Deleted_User said:

There are lenders who have no upper age limits as long as not using MiL income for the application.   So it sounds perfectly doable (without knowing the finer details obviously).   

Just something to keep in mind, are there any other siblings? The value of MiL share will be taken in to account when settling her estate on death so unless you want to sell the house to pay any other inheritances then you need to think about the logistics of settling any other inheritances due

Thanks.  The inheritance is already sorted, the funds for this purchase are my wife's inheritance, the other siblings shares are separate.

getmore4less

Custom24 said:

Thanks.  The inheritance is already sorted, the funds for this purchase are my wife's inheritance, the other siblings shares are separate.

 You say sorted  are you sure?   Are they getting the equivalent now or in the future?

if now,  is there enough left to avoid  deprivation of assets assessments if ever needed..

if later what if it is used up for care home fees so there is nothing left or HPI/inflation means the wife get double the value of the siblings share.