Mum wants me to help her get a mortgage

thesynth

Hi all, as the title suggests, my mum wants to get a mortgage for a house but she is afraid she will get rejected by the mortgage application and wants me to give my payslip and work contract to help with that.

Her partner got rejected because he doesn't make enough money, £24,000, my mum makes roughly £60,000 and I make £34,000.

She's mentioned that I won't be paying anything but my name will be on it and she ensures she can afford it but I'm still a bit wary and don't want that type of stuff over my head right now. For context I just turned 25, I am trying to start my own business and trying to move out also. I also have a loan and credit card I am paying off with no problems with monthly payments on that front.

I don't know the most about the subject but what I do know is I lose my first time buyer, may have to potentially pay stamp duty(?) and I will be legally liable should anything happen down the line.

We had a discussion where she got heated and it felt like she was trying to gaslight me, mentioning I'm not helping out my mother, she's family and not some stranger etc. However for me, I unfortunately come first and don't want to take any risks that wouldn't have any benefit and I just generally don't feel comfortable with it.

Do the pros outweigh the cons, should I help out?

RHemmings

If you don't feel comfortable, then don't do it. It should be a case of saying that you feel it's too much to ask. But, it sounds like your mother will continue trying to encourage (manipulate?) you to do this. 

elsien

If your name is on your mother’s mortgage, then you are liable if she doesn’t pay for any reason- illness, redundancy, any of The things that life tends to throw at us.

Your name will also be on the deeds of the house, meaning (as you have said) that you own a share of it, which would impact your status as a first time buyer in the future; probably prevent you getting a mortgage for your own place should you wish to buy. It could affect your affordability for renting your own place and also leave your mother vulnerable to you trying to claim a share at the house if (For example) you needed to claim means tested benefits but weren’t living there because it would count as an asset that would probably exclude you from said benefits. 

 Instead of your mother presuming she won’t get a mortgage, has she been to an independent mortgage broker with her circumstances so they can advise without any hard credit checks being completed?

The only benefit I can see for you is that your mother won’t be annoyed with you. Everything else is a potential negative.

kimwp

If she can't get a mortgage, then the banks have deemed her too high a risk IE they think she might have issues paying. By being on the mortgage, as you say, you are legally liable for paying it. You will lose first time buyer status and you will have to pay additional stamp duty if you decide to buy your own house and you are still on her mortgage. The fact that things got heated would be a good indication to not get involved.

BarelySentientAI

elsien said:

Your name will also be on the deeds of the house, meaning (as you have said) that you own a share of it, which would impact your status as a first time buyer in the future; probably prevent you getting a mortgage for your own place should you wish to buy. It could affect your affordability for renting your own place and also leave your mother vulnerable to you trying to claim a share at the house if (For example) you needed to claim means tested benefits but weren’t living there because it would count as an asset that would probably exclude you from said benefits. 

kimwp said:

You will lose first time buyer status and you will have to pay additional stamp duty if you decide to buy your own house and you are still on her mortgage. 

 Apart from being on the mortgage meaning borrowing less in future, none of the rest of this is necessarily true.

https://www.accordmortgages.com/joint-borrower-sole-proprietor

Being on a mortgage is not the same thing as owning the house.

Although there would need to be some wangling of the route of payments with it, and I don't think it's a good idea in this case.

PRAISETHESUN

A few things to comment on, which you have correctly identified:

1) Having your name on the mortgage means you are legally liable for the debt. If she ever stops paying, then the bank can rightly come after you, else they can reposes the property. Also you owning a share of a property might make you liable for other costs which you might not want to be responsible for.

2) Your credit situation will be factored into the available mortgage limits. Additionally, your mortgage would then be factored into your future applications, which will also reduce your ability to borrow in future.

3) The mortgage will link your finances. If she has debt problems, then they can affect your ability to get credit in future (and vice versa).

4) You will lose your FTB status, which means you lose the benefits available to you (LISA, stamp duty concessions, etc). 

Ultimately, you are an adult and are able to make your own decisions. Money and family never really mix well though in my experience, and it already seems like they causing you problems. Imagine how it might change in future if you do go down this path! If you do decide to go down this path, then I'd highly encourage you to get your own legal representation.

RAS

You'd lose your first time buyer status, and if you aren't resident for the whole time you own the property will be liable for Capital Gains Tax when you "sell" your portion back to mum. 

Added to which it could prevent you from buying you own home, as you'd be assessed as being liable for the mortgage on mum's house. If you were able, you'd have to pay the SDLT penalty for owning a second home.

How long does mum think she going to tie you up in her finances? And if she's this manipulative now, how easy do you think it will be to agree the value of your share when she "repays you?

I'd also be somewhat nervous as to whether this borders on mortgage fraud.

I'd suggest you move forward your plans to move out ASAP. Maybe put the business on hold until you've got the debts paid off ?

deannagone

I too would recommend she goes to a mortgage broker.  If she isn't earning enough to get a mortgage, she shouldn't be committing to take one out.  Does she have a large enough deposit?  I wonder if there are some financial problems in the background?  I'd be wondering what you aren't being told. 

But it is a very difficult situation.  Just tell her your financial commitments are too large for you to be able to help.

martindow

I agree that your gut reaction to this idea is correct.  It is all downsides for you with no real advantages. Your mother needs to go to a broker as suggested to see what is possible. 

Be firm and say no, but encourage your mum to get advice rather than her assuming £60k plus £24k won't work.

Stay strong - it is very unfair of your mother to put you in this position.

born_again

Why is she not making a joint application with her partner?
Just because on their own they were turned down, does not mean a joint one will.

Personally you entering into a joint mortgage with you mother is going to have a big effect on your future financial situation.

Voyager2002

I am puzzled why she could not get the mortgage first time round: the lender would take account of both incomes, and her income should be sufficient for the amount that she can realistically afford to borrow. I suspect that either her or her partner have had bad debt in the past and so are seen as poor risks.

Now, if you were to apply for a mortgage with someone who is seen as a bad risk, the application would still be problematic: you cannot remove that person's poor credit record. However, if you apply with them (just as if you have a joint bank account with them) you are then financially linked, and so from then on their poor credit record will also affect you.

It is possible that your mother's partner has a poor credit record; that this meant that her application with him was refused; and now if she makes an application with you then your credit rating would also be harmed.

As others have said, the smart thing for your mother to do would be to see a mortgage broker.