First Direct one person on mortgage two on deeds - worth it or hassle?

lovecake1

I am a FTB with a AIP from First Direct. I have had an offer accepted and just started the FD application and waiting for the telephone appointment. When I spoke to them about the AIP I asked if my partner could go on the deeds and they said that was possible. We did not apply for a joint mortgage as he is older (over 50 and we felt that would limit the mortgage term), has low self-employment income which has been affected by the pandemic and we did not want to borrow too much. I have a secure job and will provide the deposit. When I mentioned the one on mortgage two on deeds to my conveyancer, they were slightly surprised and it seems an unusual situation. I have looked on the forum and it looks like HSBC (which I assume is the same as FD) are the only lender providing this option, but people have had a lot of problems completing the sale in this unusual scenario (Land Registry/solicitors). Would it be better to just have myself on the deeds for now and look into other options when re-mortgaging in the future? It feels like we would be stuck with one lender when the mortgage deal ends. We are not married but have been together for more than 20 years and are more concerned with inheritance issues than separating issues. Has anyone have any advice or experience?

K_S

@lovecake1 HSBC doesn't do this anymore and I would guess that you've been given incorrect information by the FD customer service person you spoke to. I might be wrong about FD though, they are a direct-only lender so I don't know their criteria/policy.

If he is happy being off the deeds then the most convenient option will be to get a mortgage in your sole name. If he wants to be on the deeds and you don't need his income for affordability then there are a few lenders who will consider ignoring his age (and income) for term or let it go up to 80.

getmore4less

If it is about inheritance what are the plans for your estates?

The key issue with not being married  is there is no transferable nil rate bands so depending on estate sizes have a partner inherit can be the more expensive option.

With wills in place  both being on the deeds can simplifies the process a bit and can avoid probate, but getting a grant is not that big a problem and if the plan is to stay in the property rather than sell there is no rush anyway.

mat1964

I'm pretty sure you can't do this as I have been looking into it.  a Joint mortgage but one person on the deeds is possible with some providers but not the other way round.  

If it's just inheritance you are concerned with, then the solicitor can sort that out for you to make sure the proper agreements are in place - but IHT would be payable if you are not married and it's above the threshold.

getmore4less

mat1964 said:

I'm pretty sure you can't do this as I have been looking into it.  a Joint mortgage but one person on the deeds is possible with some providers but not the other way round.  

If it's just inheritance you are concerned with, then the solicitor can sort that out for you to make sure the proper agreements are in place - but IHT would be payable if you are not married and it's above the threshold.

it has been an option, there was a case on here where none of the(2) borrowers were on the deeds

I think I saw a post from a broker  saying HSBC no longer do them

lovecake1

Thanks for your replies.

K_S said:

@lovecake1 HSBC doesn't do this anymore and I would guess that you've been given incorrect information by the FD customer service person you spoke to. I might be wrong about FD though, they are a direct-only lender so I don't know their criteria/policy.

If he is happy being off the deeds then the most convenient option will be to get a mortgage in your sole name. If he wants to be on the deeds and you don't need his income for affordability then there are a few lenders who will consider ignoring his age (and income) for term but they'll be more expensive than the likes of FD.

FD definitely stated it was possible but it would delay the process as 'independent legal advice' would be needed. We are concerned about affordability, so if going to another lender would be more expensive I think it is best to try to get the FD deal for now and re-consider things when the fixed term ends.

getmore4less said:

If it is about inheritance what are the plans for your estates?

The key issue with not being married  is there is no transferable nil rate bands so depending on estate sizes have a partner inherit can be the more expensive option.

With wills in place  both being on the deeds can simplifies the process a bit and can avoid probate, but getting a grant is not that big a problem and if the plan is to stay in the property rather than sell there is no rush anyway.

I don't have much other assets so it would take some time for my estate to get to the IHT threshold. I am planning to make a will to leave the property to my partner. We plan to live in it for a long time.

K_S

lovecake1 said:

Thanks for your replies.

K_S said:

@lovecake1 HSBC doesn't do this anymore and I would guess that you've been given incorrect information by the FD customer service person you spoke to. I might be wrong about FD though, they are a direct-only lender so I don't know their criteria/policy.

If he is happy being off the deeds then the most convenient option will be to get a mortgage in your sole name. If he wants to be on the deeds and you don't need his income for affordability then there are a few lenders who will consider ignoring his age (and income) for term but they'll be more expensive than the likes of FD.

FD definitely stated it was possible but it would delay the process as 'independent legal advice' would be needed. We are concerned about affordability, so if going to another lender would be more expensive I think it is best to try to get the FD deal for now and re-consider things when the fixed term ends.

@lovecake1 That's very interesting. Please do update the thread on how you get on. "Which lender does 'Joint Owner Sole Borrower' mortgages?" is a very frequently asked question on these forums and the usual answer has been none that people are aware of.

lovecake1

K_S said:

FD definitely stated it was possible but it would delay the process as 'independent legal advice' would be needed. We are concerned about affordability, so if going to another lender would be more expensive I think it is best to try to get the FD deal for now and re-consider things when the fixed term ends.

@lovecake1 That's very interesting. Please do update the thread on how you get on. "Which lender does 'Joint Owner Sole Borrower' mortgages?" is a very frequently asked question on these forums and the usual answer has been none that people are aware of.

I will post an update after I had the application appointment with FD. Still not sure whether to go for this set up even if it is an option due to the posts showing issues during the completion with this sort of mortgages. We just want to secure the property as we have been in private rented accomodations for all our life.

lonibra

We had similar and the bank went up to 78 for my partner as her income wasn't being counted. Just get an MB on the case while you're waiting for the appointment. I don't know about forstdorect but my MB got me a mortgage at normal rates. How long a term do you need?

lovecake1

lonibra said:

We had similar and the bank went up to 78 for my partner as her income wasn't being counted. Just get an MB on the case while you're waiting for the appointment. I don't know about forstdorect but my MB got me a mortgage at normal rates. How long a term do you need?

Around 23 years, I am 48 and my partner is 55. Who is your MB?

PDawg1980

This is exactly what I went through with First Direct last year as a FTB. As background, I am 40 and my partner is 57 (together for 20+ years, comfortable with joint finances). We tried to go through a MB first but this was proving difficult - we could only get a 23 year joint mortgage or I go solo and partner is not on the deeds. 

As I bank with FD also, I got in touch and they said they can do sole mortgagor with 2 names on the deeds. We had a 25% deposit and they offered 1.69% for a 5 year fix which was reasonable in comparison to other lenders and we went with them. Thought it would be a straightforward but it took nearly 6 months to complete on our property. Part of the reason is that we were based overseas at the time and FD would not accept signed copies of the documents, there was always a 2 or 3 week wait in getting documents to them. 

If anyone is looking at going down this route, the key part is keeping your conveyancer, estate agent and vendor up to date. Coincidentally, our vendor was a retired mortgage broker and was adamant this wasn't possible. It took showing them sight of letters from FD to convince them. 

The actual document is an A2 indirect charge form. FD sent me a letter to sign, giving them permission to speak to my partner. Once they received this, they sent a letter to my partner requesting her solicitor/conveyancer details. It helped that I kept my conveyancer in the loop about this. FD were content that both my partner and I can use the same firm, as long as it wasn't the same solicitor to avoid a conflict of interest. My partner had to have independent legal advice to explain that although she was on the title deeds, she signed to agree that in the event the mortgage wasn't paid and repossession took place, she agreed to surrender all rights and interest she had in the property. 

You can do a google search for First Direct A2 indirect charge form if anyone wants to read the T&C's. I get that it is always advised to use a mortgage broker, but in our case it really wasn't. FD are a direct lender only and I am not sure if you have to be an account holder with them in the first place or not. 

This is my first post on here - apologies if the format is incorrect. Hope people found our experience useful and happy to answer any further queries.