I own my house outright by myself, how can my partner get a mortgage on half?

jenna01221

Hi, 
I own my property outright and my partner would essentially like to get a mortgage to own 50% to essentially buy me out of half of the home so that we own it together. 
He is not yet on any deeds and we are wanting to know any information that could help us. 
How would this work as we know I would have to be named on the mortgage but as a non payable party. And what if we want to sell on later down the line and buy a bigger house together? Would I get the 50% of my half back in cash too? 
Apologies if this is confusing, we can't seem to find a straightforward answer and seem to be going around in circles. 
Thank you for your time! 

kingstreet

No. Ownership and mortgage would have to be joint. You can't mortgage a portion of a property which also belongs to someone else.

Exodi

kingstreet said:

No. Ownership and mortgage would have to be joint. You can't mortgage a portion of a property which also belongs to someone else.

@kingstreet is infinitely more knowledgeable on this than me so may correct me, but I believe the reason for this is because let's say the OP and the partner were joint owners on the deeds, but the partner was solely named on the mortgage.

Let's say the partner decides to stop paying the mortgage for a long time and the bank wants their money back, and it escalates to a repossession. The bank now has a complicated situation in which they're trying to sell a house which someone else also owns, that was not a party to the contract. What if the OP don't want to sell their house? It is very difficult to sell half a house.

Rather than get involved in nonsense like this, it is the status quo that people on the deeds = people on the mortgage and vice versa.

kingstreet

HSBC used to offer an indirect charge product that allowed more owners than borrowers but it hasn't been available for a couple of years.

user1977

Exodi said:

kingstreet said:

No. Ownership and mortgage would have to be joint. You can't mortgage a portion of a property which also belongs to someone else.

The bank now has a complicated situation in which they're trying to sell a house which someone else also owns, that was not a party to the contract. What if the OP don't want to sell their house? It is very difficult to sell half a house.

To clarify (maybe!), in any case all the owners need to grant the legal charge (the thing which is actually the mortgage and gets registered). So it's not possible for there to be a mortgage at all unless all the owners sign up to the security being put over the property.

But it's legally possible to have only one party who needs to repay the loan. But the banks don't like that, because of the potential headaches about the mismatch between the parties (e.g. what if the non-borrowing owner complains about not being properly advised, they weren't even getting the benefit of the loan, they're not entitled to know what's happening with the repayments, etc).

jenna01221

Just to clarify I'm fine with my name being put on the mortgage however my partner would be and is absolutely fine with being the sole payer of it. I know it has to be a joint mortgage or remortgage with his name on the deed too. But what would happen if we sold the house in the future?

housebuyer143

jenna01221 said:

Just to clarify I'm fine with my name being put on the mortgage however my partner would be and is absolutely fine with being the sole payer of it. I know it has to be a joint mortgage or remortgage with his name on the deed too. But what would happen if we sold the house in the future?

You need to set up tenants in common with a declaration of trust to protect your share.

Emmia

And if your relationship goes belly up? I'd invest/save the 50% so you can buy him out if necessary.

user1977

jenna01221 said:

what would happen if we sold the house in the future?

The mortgage would need to be repaid.

fergie_

Another approach would be to seek legal advice and draw up some kind of agreement where your partner is gradually 'buying' half the house. In other words, rather than taking out a mortgage or loan, they simply make payments to you (with or without interest) over the agreed time for the agreed amount.

400ixl

Do you need the lump sum? If not, then why pay interest on money you don't need to?

Would it not be better your partner just pays you a monthly sum and you get some form of legal document drawn up that allow that money to purchase a growing percentage of the property over time.