Mortage Company and Deeds

king100

Very quick question.

I am receiving some money that will be put down on a house.

Say for arguements sake 200k cash.

We are buying a property for 300k.

Due to my partner the only one working she is the one getting the mortage, as i have no income.

The mortage company has said that the deeds of the house cannot be in my name as i am not liable for the mortage.

Yet i am the one stumping up 200k.

Is this true that i cannot be on the deeds just because i am not on the mortage?

RHemmings

It sounds reasonable that if the bank is lending money to your partner with a house as security, that she should own the property. Otherwise if they have to repossess, it could be difficult if she doesn't have her name on the deeds.

You could try asking some other banks. It might also be possible for you both to have your name on the deeds.

CLAPTON

just get a joint mortgage and have both names on the deeds... its what most people do (i.e with non earning spouses etc)
just keep it simple.

king100

Unfortunatley i dont want a joint mortage.
I am the one paying the cash. Why do i need to burden myself with the issue of a mortage.
She will have her name on the deeds but i want mine on there. The mortage company say that if i want them on the deeds i have to be part of the mortage.Why do i have to be part of the mortage when i am paying a lump sum for the house myself. So i am actually owning 2/3 rds of the house and the mortage company 1/3rd but they get to determine terms.

What would the case be if there was two investors in a property one had cash one needed mortgage to buy the property.

You are telling me that the investor that is paying cash CANNOT have his name on the deeds because the other investor is the only one allowed because he is getting a mortage. Yet the investor with the cash doesnt want to have a mortgage. Why should he, he is paying cash?

takoo

Hi King100

These are points which I think you need to bear in mind - no doubt others will add more issues.

1 I had always understood that the ownership of a property could beheld by two or more persons - upto four as:

1. joint owners- HERE THE SURVIVOR TAKES ALL, or
2. tenants in common (but this may be two persons) - HERE THE PARTNERS CAN WILL THEIR SHARE INDEPENDENTLY.

2 Also the "deeds" are USUALLY TAKEN TO BE in fact the compulsory registation of the ownership of the the property as the local Land Registry.(but I may be wrong)

3 The proportions owned could be agreed generously at say 50 : 50 or in this case perhaps 100 : 200 in your favour,

4 So if the house was sold at £300K you would receive £200K and your partner £100k (then she deducts the outstanding mortgage).


5 Note although your partner is paying actual interest you are as well (in effect). It is the interest you could have earned on the £200k you received HAD YOU NOT PUT IT ON THE HOUSE.

6 Of course if house prices drop over the next few months and you (both) have to sell I suppose that the proceeds will pay the oustanding mortgage and in any negative equity situation you will both personally pay 100 : 200 out. You may be liable for -I think but I am tired now!!

7 As to the mortgage company - they may be talking about the deeds for the money to be borrowed. You may need (together or separately) the advice of an independent solicitor, ie independent of the mortgage solicitor.

8 In your situation I would not be willing to pay out £200K and then not be a joint tenant or tenant in common owner of the freehold of the house to be purchased - talk to your own solicitor and other mortgage companies.

9 At the same time IF YOU DO NOT HAVE A WILL consider having a will drawn up by your personal solicitor after taking full advice about the purchase.

10 If you want informal advice at this stage see the Citizens Advice Bureau.

All the best

Takoo

Ian_W

Much of what Taktoo says is right - or near as damn it - but that isn't the issue. How you own the house, whether 50/50 or 1 third, two thirds is a matter between yourselves and having it legally in writing and having a Will is all good stuff but simply misses the point.

The lender, Bank or Building Society, will only lend your partner the money in the form of a mortgage if a legal charge is secured against the property giving them the right to repossess it if she defaults - and sell it to recover the money. If you are on the deeds but not on the mortgage the legal charge wouldn't be enforceable - how can you sell half [or whatever share] of a house? If they can't do that, they can't recover their money - so won't lend it in the first place.

AFAIK your options are:
1. As CLAPTON says get a joint mortgage - but do document legally how the property is owned. Do be aware your stake in the property is at risk if your partner defaults and the mortgage can't be cleared by the forced sale price.
2. Your partner gets an unsecured loan for her share which might be very difficult given the sum involved.
3. Buy a £200K property which you own outright.

Sorry but no-one is obliged to lend you and your partner the money and I doubt, even pre the credit crunch, if you could have found a lender who would have offered a mortgage without the right to repo' the property if she defaults.