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Having Charges put into a Title deed?

Good evening all. I have a question in relation to having a Charge put onto a property which I am contributing money towards to a Family Members house Purchase, So in the event of the House ever being Sold etc I would get the money I contributed back this is what I gather this Charge is added into the Title Deed. 
I have spoken to a lawyer about it they do charge quite a fee for this process.
I have been told this can also be done by myself also but need to look into how involved it is .
can this also be done after Completion?
Has anyone ever had this charge done before 
thanks in advance.

Comments

  • eddddy
    eddddy Posts: 17,822 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 30 December 2023 at 11:06PM

    can this also be done after Completion?


    Yes - but that would defeat the main purpose of the charge.

    In simple terms, you want a charge put on the property because you are giving the Family Members a loan and you don't trust your Family Members to pay back the loan voluntarily.

    So if you give them the money, then they complete the purchase - presumably you wouldn't trust the Family Members to sign the charge documents after completion either.


    More generally, are your Family Members buying with a mortgage?

    If so, what you describe is called a loaned deposit. (Or maybe a loaned partial deposit.)

    They'll have to discuss this arrangement with their mortgage lender. Most mortgage lenders don't allow loaned deposits,


  • Flugelhorn
    Flugelhorn Posts: 7,198 Forumite
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    agree most mortgage companies won't accept another charge on the deeds - this has to be sorted out before completion
  • Alderbank
    Alderbank Posts: 3,762 Forumite
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    Your best bet might be joint ownership. Up to four people can be joint owners. Do you own your own house or do you rent?
  • user1977
    user1977 Posts: 17,438 Forumite
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    Alderbank said:
    Your best bet might be joint ownership. Up to four people can be joint owners. Do you own your own house or do you rent?
    It doesn't sound a good bet if all they're wanting to do is lend some money, not become a joint owner.
  • daveyjp
    daveyjp Posts: 13,401 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Registering a charge is straightforwards,  drawing up the document which the charge relates to isn't and this is where the costs are incurred.

    You need a deed drawing up which sets out the full terms and conditions of the loan, repayment terms etc.

    If there is a mortgage the mortgagee may need to agree the second charge.  All needs to be done before completion, but as soon as the buyer states a third party loan is being used for a deposit the mortgagee may not be so keen to lend.
  • Alderbank
    Alderbank Posts: 3,762 Forumite
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    user1977 said:
    Alderbank said:
    Your best bet might be joint ownership. Up to four people can be joint owners. Do you own your own house or do you rent?
    It doesn't sound a good bet if all they're wanting to do is lend some money, not become a joint owner.
    OK, then another option is a Family Springboard Mortgage from Barclays. The 'helper' pays in 10% of the price as a 'loan'. This acts as deposit so the homebuyer gets a 100% mortgage on the rest.
    The helper gets interest on their loan which is guaranteed by Barclays and is paid back to them after 5 years.

    Does that sound a good bet?
  • how does the Helper calculate the tax on the income received........?
  • Alderbank
    Alderbank Posts: 3,762 Forumite
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    edited 31 December 2023 at 6:33PM
    Each year Barclays send a report of interest paid to helper and also to HMRC. HMRC calculate tax on the interest  based on helper's income and other investments. 

    Details here:
    https://www.gov.uk/apply-tax-free-interest-on-savings#:~:text=You%20pay%20tax%20on%20any,you%20pay%20the%20tax%20automatically.
  • user1977
    user1977 Posts: 17,438 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 31 December 2023 at 6:43PM
    Alderbank said:
    user1977 said:
    Alderbank said:
    Your best bet might be joint ownership. Up to four people can be joint owners. Do you own your own house or do you rent?
    It doesn't sound a good bet if all they're wanting to do is lend some money, not become a joint owner.
    OK, then another option is a Family Springboard Mortgage from Barclays. The 'helper' pays in 10% of the price as a 'loan'. This acts as deposit so the homebuyer gets a 100% mortgage on the rest.
    The helper gets interest on their loan which is guaranteed by Barclays and is paid back to them after 5 years.

    Does that sound a good bet?
    It sounds more sensible, but we'll need to wait for the OP to clarify whether the borrower is also needing a mortgage from another lender.
  • Alderbank
    Alderbank Posts: 3,762 Forumite
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    Almost every mortgage provider offers family mortgages, including all the big ones, but each one has slightly different T&Cs. For example, with some the helper also has to have a mortgage with the same company.

    https://www.uswitch.com/mortgages/guides/family-assist-mortgage/

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