Mortgage query

[pork911]

maccboy said:

pork911 said:

seems already messy. appears OP has no interest in the property but the bf may well have already.

I have an interest of £175k and he has an interest of £0.

There must be something missing from your explanation then.


At the moment it looks like you gave your daughter £175k as a gift. Her then using it to buy a house gives you no interest in the house since it was her money at that point not yours.

Boyfriend may well already have an interest by cohabiting.

So what's missing from your explanation?

[maccboy]

Terminator X said:

Never lend to family or friends. Good luck!

TX.

Thank you for your advice. Much appreciated, if too late. We'll cope, thanks.

[AdamV12V]

Ok what you should have done to protect yourself, and your daughters interest (assuming you want to orotect her against any future adverst attempts go gain equity from the bf, is to put the property), is put the property in “tennants in common” ownwrship. Under that you define how much equity you have and how much she has, it can be however you wish to define it, and is in the form of a deed associated with the title of your property and is lodged with the land registry against the tennants in common ownership.

Without that, your daughter is sole tennant, and as such she owns it outright.

Any part of her share may be liable to a legal challenge if the relationship with the bf goes pete tong, so effectively as it stands he could make a claim against part of the whole of the property.

Its not too late however. You can still use a solicitor to transfer the propety into tennants in common and define what you own and what she owns.

Regardless of the above, if he wants to officially take on the mortage and some equity, then he and your daughter will need to apply with to her mortage company to make a 1 to 2 transfer of equity, and he will, as part of that legally apply to share the remaining loan and equitt. You could at this point change it to tennants in common too, subject to both agreeing, and state your equity in the property and theirs. Thats probably your best option right now. If you dont do the tennants in common, them they would become joint tennats, with all equity and debt being equal, joint and several, between the two of them.

Hope that helps.

[pork911]

AdamV1 said:

Its not too late however. You can still use a solicitor to transfer the propety into tennants in common and define what you own and what she owns.

Despite the mortgage?

[Jakg]

maccboy said:

pork911 said:

seems already messy. appears OP has no interest in the property but the bf may well have already.

I have an interest of £175k and he has an interest of £0.

I don't think you have an interest in the property.

Your not on the deeds and you don't have any kind of secured credit on the property.

You gifted your daughter £175k - which she used to buy a house. But it was a gift - you don't get a share of what it pays for.

Of course you may have an understanding it was really a loan or whatever, but this is why mortgage companies demand a statement explicitly stating it's a gift in some cases - https://www.halifax.co.uk/mortgages/help-and-advic...

[AdamV12V]

pork911 said:

AdamV1 said:

Its not too late however. You can still use a solicitor to transfer the propety into tennants in common and define what you own and what she owns.

Despite the mortgage?

Yes, not too late, but it would involve the lenders consent …. So would be subject to an admin charge from them on top of the legal fee, plus the time taken to sort it all out. Better late than never though…

Edited by AdamV12V on Friday 24th March 23:12

[Hammersia]

maccboy said:

Terminator X said:

Never lend to family or friends. Good luck!

TX.

Thank you for your advice. Much appreciated, if too late. We'll cope, thanks.

I dunno man, you've started a thread asking for advice, and you've been gently given a lot of great advice.

Upto you if you action it or action it not.

[pork911]

AdamV12V said:

pork911 said:

AdamV1 said:

Its not too late however. You can still use a solicitor to transfer the propety into tennants in common and define what you own and what she owns.

Despite the mortgage?

Yes, not too late, but it would involve the lenders consent …. So would be subject to an admin charge from them on top of the legal fee, plus the time taken to sort it all out. Better late than never though…

Edited by AdamV12V on Friday 24th March 23:12

I'm struggling to see them agreeing unless (at least) op is also on the new mortgage and that new mortgage is against the whole property,... and the boyfriend waives his accrued rights.

[pork911]

(also if all sorted out...tax issues - slight potential (god forbid) issue on daughters gift to op, definite future CGT issue for op)

As mentioned before, all a bit of a mess.

[Glosphil]

Jakg said:

maccboy said:

pork911 said:

seems already messy. appears OP has no interest in the property but the bf may well have already.

I have an interest of £175k and he has an interest of £0.

I don't think you have an interest in the property.

Your not on the deeds and you don't have any kind of secured credit on the property.

You gifted your daughter £175k - which she used to buy a house. But it was a gift - you don't get a share of what it pays for.

Of course you may have an understanding it was really a loan or whatever, but this is why mortgage companies demand a statement explicitly stating it's a gift in some cases - https://www.halifax.co.uk/mortgages/help-and-advic...

When I helped my daughter buy her first house the bank required her to state the source of the money used as a deposit. When the bank knew it was me I was sent a form on which I had to state the money was a gift.

[AdamV12V]

pork911 said:

I'm struggling to see them agreeing unless (at least) op is also on the new mortgage and that new mortgage is against the whole property,... and the boyfriend waives his accrued rights.

The people named on the mortgage ALWAYS has to be the same people named at the land registry as the owners, be that either as tenants in common or joint tenants.

Assumed rights on spilt ups / settlements are an entirely different thing.

Until then as long as the daughter and bf are on good terms there is no reason why they wouldnt agree to a change. If things have already got sticky then yes, there maybe a struggle but all the more reason for the op and daughter to implement a tennants in common legal change asap.

CGT issues are entirely seperate to anything I have posted above.

Edited by AdamV12V on Saturday 25th March 02:06

[Enut]

maccboy said:

My daughter and her boyfriend moved into a house last year. She had savings - along with a LISA - which she put down as a deposit, and she took out a mortgage. Her boyfriend didn't want to commit money to the house (which went down well!) so I lent her the rest.
Unless the relationship goes pear-shaped, at some point, presumably, the boyfriend will decide he does want to commit to the house (and her) and will therefore need a mortgage to pay my share back?
I'm not sure how this can/will happen as there is already a mortgage on the house. Would she have to bin her mortgage and start again with a joint one?

I presume you signed paperwork for the lender confirming that the £175K was an outright gift? Most lenders wouldn't lend without such a letter.
If so it is up to your daughter if she wants to allow boyfriend to 'buy into' the property, i.e. be added to the deeds and mortgage. It's her property you don't have a share to pay back.
That, I think, is the legal position (IANAL). Of course you and your daughter may have a different view of the money, which potentially makes it a gift with reservation or a loan, but proving that may be difficult given what you have signed already, and have other consequences (IHT).
Let's hope you don't ever need the money back or, indeed, that you never regret the 'gift'.
Well done for helping your daughter out by the way, not many can, at least not to that extent.

[maccboy]

Thanks to everyone for the replies. I really appreciate the input.
The money I put into the purchase wasn't mentioned by the mortgage company so I assume they took it as part of the deposit. My daughter is more than aware of the situation between us regarding the money so that won't be an issue. She got her boyfriend to sign a 'disclaimer' form when the house was purchased so hopefully that won't come back to bite us.

[pork911]

AdamV12V said:

pork911 said:

I'm struggling to see them agreeing unless (at least) op is also on the new mortgage and that new mortgage is against the whole property,... and the boyfriend waives his accrued rights.

The people named on the mortgage ALWAYS has to be the same people named at the land registry as the owners, be that either as tenants in common or joint tenants.

Assumed rights on spilt ups / settlements are an entirely different thing.

Until then as long as the daughter and bf are on good terms there is no reason why they wouldnt agree to a change. If things have already got sticky then yes, there maybe a struggle but all the more reason for the op and daughter to implement a tennants in common legal change asap.

CGT issues are entirely seperate to anything I have posted above.

Edited by AdamV12V on Saturday 25th March 02:06

Sorry I'm still struggling.


Ignoring tax and ignoring bf and just looking at transferring op in and what the bank will be agreeing to -

Is daughter selling or gifting a £175k chunk to op? yet op nonetheless is added to the mortgage to secure the separate mortgaged chunk? Which is secured against the whole house?

[Countdown]

Glosphil said:

When I helped my daughter buy her first house the bank required her to state the source of the money used as a deposit. When the bank knew it was me I was sent a form on which I had to state the money was a gift.

Yep - same here.

OP - from what I’ve read there is no formal agreement between you and your daughter. If that’s the case then (like it or not) it was a gift. If she chooses to repay you then all well and good but, as things stand, you have as many rights over the property as her boyfriend.

[maccboy]

Countdown said:

Yep - same here.

OP - from what I’ve read there is no formal agreement between you and your daughter. If that’s the case then (like it or not) it was a gift. If she chooses to repay you then all well and good but, as things stand, you have as many rights over the property as her boyfriend.

Interesting. I don't think it'll cause any issues and my daughter is very keen to pay me back!

[vulture1]

Does anyone think the daughter wants a house for the next stage of the relationship and the bf obviously isn't sure and wants an escape route? Seems they are different stages of the relationship.

[IJWS15]

Glosphil said:

When I helped my daughter buy her first house the bank required her to state the source of the money used as a deposit. When the bank knew it was me I was sent a form on which I had to state the money was a gift.

Me too

[Hammersia]

vulture1 said:

Does anyone think the daughter wants a house for the next stage of the relationship and the bf obviously isn't sure and wants an escape route? Seems they are different stages of the relationship.

Certainly the boyfriend has gone down a notch or two in my estimation since the start of this thread.

[AdamV12V]

pork911 said:

Sorry I'm still struggling.


Ignoring tax and ignoring bf and just looking at transferring op in and what the bank will be agreeing to -

Is daughter selling or gifting a £175k chunk to op? yet op nonetheless is added to the mortgage to secure the separate mortgaged chunk? Which is secured against the whole house?

Currently the legal position is the daughter owns it all, so yes it was a gift from the OP to the daughter - legally! Morally the daughter may agree that she owes the OP £175k back, but that is down to her goodwill, and yes if she moves back to a legal position of returning it to the OP, then yes it would be a gift back.

If the op moves to a tenants in common situation, whereby a deed attached to the property and lodged with the land registry states that he owns the first £175k of equity and the daughter the rest (as an example), then this would put his name on the title as a co-owner (albeit as tenants in common, rather than the normal situation of joint tenants). This would mean that the mortgage must also be moved into his shared name, as the people named on the mortgage loan MUST be the same as the names of those who own the property at the land registry.