advice or help

Sandralynn

My cousin has sold her house and wanted to buy a bungalow with her son, her son has a mortgage for £70,000 and she was putting down £80,000 from the sale of her house. She is 60 so didn’t want a mortgage in her name. They have been told that she cant have her name on the deeds and even though she is putting the deposit she has no rights to half the property.

 

Is there a way around this problem? She is concerned that should her son marry that she could then be homeless, even though he has assured her this wouldn’t happen she obviously wants to protect herself, and have something to leave her other children in her will.

 

Any advice would be really appreciated.

getmore4less

Who told them?

There are options but she will still have to allow the lender to reposes to get their money back if the son stops paying the mortgage.

user1977

The vast majority of people posting here are looking for "advice or help", it's better if you use a more specific subject line.

TBagpuss

There are options. It's correct hat normally,  a lender will not give a mortgage unless the mortgage is in the same names as the deeds, so one option would be to see whether the lender will agree to mum being named on the mortgage as well as her son.

She and her son can then have a separate agreement about how the mortgage is paid.

The second option would be for the house to be purchased in son's name, subject to the mortgage, and for there to be a formal declaration of trust stating that it is held on trust for the two of them as to 53% to her, 47% to him . 

A third option would be for son to hold the house in his name, with the first charge to the mortgage company and a second legal charge secured over the property in mum's favour for a lump sum equal to 53% of the value of the property. That would technically be her lending him £80,000 towards the purchase price but would protect her money - if he dies or divorced or fell out with her, he or a court or his estate could force a sale of the property but shed get her money back.

It would also be possible to draw up documentation give her rights to occupy the property although this would not be effective against the lender repossessing, but would give her protection if she fell out wither her son.

She and he need to each get separate and independent advice, as their interests are potentially in conflict even though their intentions at present are not.

Is the plan that they both live together in the bungalow? 

lincroft1710

Of course she would have rights to the property!!


Your cousin would actually have a larger equity in the property than the lender. I would suggest she tells her son to find another lender or failing that get a competent solicitor to draw up an agreement that your cousin owns an 80,000 divided by cost of property, share of the property.

Sandralynn

TBagpuss said:

There are options. It's correct hat normally,  a lender will not give a mortgage unless the mortgage is in the same names as the deeds, so one option would be to see whether the lender will agree to mum being named on the mortgage as well as her son.

She and her son can then have a separate agreement about how the mortgage is paid.

The second option would be for the house to be purchased in son's name, subject to the mortgage, and for there to be a formal declaration of trust stating that it is held on trust for the two of them as to 53% to her, 47% to him . 

A third option would be for son to hold the house in his name, with the first charge to the mortgage company and a second legal charge secured over the property in mum's favour for a lump sum equal to 53% of the value of the property. That would technically be her lending him £80,000 towards the purchase price but would protect her money - if he dies or divorced or fell out with her, he or a court or his estate could force a sale of the property but shed get her money back.

It would also be possible to draw up documentation give her rights to occupy the property although this would not be effective against the lender repossessing, but would give her protection if she fell out wither her son.

She and he need to each get separate and independent advice, as their interests are potentially in conflict even though their intentions at present are not.

Is the plan that they both live together in the bungalow? 

Thank you for being so helpful. Yes they are living together now and would be in the Bungalow. The mortgage will only give her son the mortgage as her age is against her for years of borrowing and so will only allow his name on the deeds. 
Would you mind explaining the third option more fully, I dont really understand what the second charge means

Sandralynn

getmore4less said:

Who told them?

There are options but she will still have to allow the lender to reposes to get their money back if the son stops paying the mortgage.

Thank you for your reply. The Mortgage company have told them