Mortgage Advice please

DWHITCOMBE6

So for the last 20 years I’ve been on my mums mortgage due to her and my dad divorcing and her not being able to obtain a mortgage on her own due to her age & income.

We’re now at the stage finally where my mum is in a position to pay off the remaining mortgage so I will no longer have a mortgage on my credit file, however my name is on the deeds to the house.

Due to being tied to the mortgage I’ve been unable to get a house of my own and have been renting on / off during this time - have tenancy agreements to show this.

However, I have now saved up some money to be able to put a deposit down on a house so I can actually own something of my own for myself and daughter but the problem is I’m no longer eligible for a first time buyer mortgage, and have therefore been told that I would need more than the 5% I have saved.

My question is would it better for me to come off the deeds of her home before starting the mortgage process on my own or does it really make a difference? I have asked google (of course!) and the response I’ve had is that they will use my mums home as another possible liable debt should anything need repairing / replacing in the house yet I’ve not lived there & not paid into the house. And does anyone know of any other mortgage schemes (not first time buyers) with a 5% deposit?

Just need some advice as I’m so done with paying rent all the time & can’t afford solicitor fees for advice & in an ideal world would like to be able to leave something for my daughter

Grateful for any advice please guys - thanks in advance

EssexHebridean

You won't be eligible for the first time buyer relief on the stamp duty either - hopefully you realise this and are budgeting accordingly? Coming off the title of your Mum's property before buying does at least mean that you won't have the higher rate SDLT to pay though - so I would get that sorted if I were you.

On the mortgage front it will depend what the lender's specific criteria are I suspect, although anything geared towards actual FTBers won't suit.

Keep_pedalling

There is another complication in that you may face a CGT liability when coming off the deeds. Are you joint tenants or tenants in common? If the latter was a deed of trust put in place documenting the ownership split?

Myci85

In terms of a mortgage, when we were buying 20 months ago, there seemed plenty of 5% deposit mortgage products around, not only for FTB. You just will be in a higher interest banding than if you can save 10%.

You wouldn't need to pay solicitor fees for advice on a mortgage, it would be a broker you would want to speak to, and in my experience, even fee charging brokers will happily give out initial advice to see if they're likely to be able to find you a product. There are also plenty of fee free brokers out there, though usually only recommended if you're a very straightforward case to place.

DWHITCOMBE6

Thank you so much this is really helpful

DWHITCOMBE6

Thank you sorry I should have said I’m in Wales and am looking at properties under the Stamp Duty / LTT rate anyhow.

DWHITCOMBE6

https://forums.moneysavingexpert.com/discussion/comment/82114174#Comment_82114174

How does this work please? As I don’t actually own the property and haven’t paid into it. I don’t think I’m a tenant as I haven’t lived there, and no other deed was put in place documenting any split etc. Thanks in advance for your help

anselld

https://forums.moneysavingexpert.com/discussion/comment/82114963#Comment_82114963

You are on the title so you own it. Unless there is a deed to state otherwise you own 50%.

You cannot change the loss of FTB status or potential capital gains liability but you can remove the 5%+ LTT liability for second home by coming off the title and gifting your share to your Mum.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82114963#Comment_82114963

The term tenant in common refers to a form of ownership. The default is that each of you own 50% of the property but an uneven split can be documented with a deed of trust.

Joint tenants means you jointly own 100% of the property with the propert passing to the surviving owner on the first death.

Assuming there is no deed of trust is in place transferring full ownership to your mother means that there will be a CGT liability on 50% of the gain in value over the last 20 years.

silvercar

Arguably you only went on the mortgage to facilitate your mother getting a mortgage, so had no beneficial interest and therefore no CGT liability. You will probably need an accountant to help you argue this point with hmrc. Too late now, but it would have been better to do a ‘joint borrower, sole proprietor mortgage’, that would make clear that you were on the mortgage but not the deeds and not put you at risk of CGT, losing FTB Status or paying extra SDLT.