Joint mortgages?
Discussion
Does anyone know if there any implications or legal issues in a joint mortgage, if one of the parties isn't actually going to pay anything into the venture or live there?
Basically my wages aren't enough (in a mortgage company's eyes anyway) to secure a mortgage on the sort of property my young family would need. My partner doesn't work as she is a stay at home mum to our 2yr twins with a third on the way. Once all kids are grown up and in school, she'll go back into teacher training and back to full time work, but this will be at least 4yrs away. We've rented the last four years.
Obviously the main issue is the fact that I'm the sole earner. I suspect that if she was also in full time work the issue wouldn't be there.
So my question to those who may know is.....if I were to add my sister on to the mortgage application, which then took her wages into account, are there any implications in that (other than us defaulting and it screwing up her credit record or personal issues between us)? The way I looked at it was it'll be good for her credit rating as much as anything. She won't pay anything into it, it's almost like adding her onto my car insurance as a second named driver, just to bring the premium down. She won't drive the car, or pay anything on it. She's just named.
It's only something I cooked up last night in my head and I haven't asked her yet. I wanted to educate myself first! Can anyone offer any input?
Basically my wages aren't enough (in a mortgage company's eyes anyway) to secure a mortgage on the sort of property my young family would need. My partner doesn't work as she is a stay at home mum to our 2yr twins with a third on the way. Once all kids are grown up and in school, she'll go back into teacher training and back to full time work, but this will be at least 4yrs away. We've rented the last four years.
Obviously the main issue is the fact that I'm the sole earner. I suspect that if she was also in full time work the issue wouldn't be there.
So my question to those who may know is.....if I were to add my sister on to the mortgage application, which then took her wages into account, are there any implications in that (other than us defaulting and it screwing up her credit record or personal issues between us)? The way I looked at it was it'll be good for her credit rating as much as anything. She won't pay anything into it, it's almost like adding her onto my car insurance as a second named driver, just to bring the premium down. She won't drive the car, or pay anything on it. She's just named.
It's only something I cooked up last night in my head and I haven't asked her yet. I wanted to educate myself first! Can anyone offer any input?
Agree with MRSNEAK but you also need to then have a legal agreement signed between you (even if you are family) because if things go wrong as the joint mortgagee regardless of whether she has paid in she can force you to sell and take half the profits. Speak to the bank and it may be possible that she can be a guarantor and therefore not actually need to be on the mortgage.
However, you say that the bank are not happy to lend on your salary which suggests to me that you would be really stretching yourself to buy this place. When banks usually refuse to give an amount for mortgage its for good reason. Bear in mind the interest rate is only going one way and you need to be sure you can pay even if the interest rate went from 0.5 as it is now to say 5%
However, you say that the bank are not happy to lend on your salary which suggests to me that you would be really stretching yourself to buy this place. When banks usually refuse to give an amount for mortgage its for good reason. Bear in mind the interest rate is only going one way and you need to be sure you can pay even if the interest rate went from 0.5 as it is now to say 5%
I should have added that the plan would be once my O/H is back in full time work, we'd aim to re-mortgage in our own names and effectively remove her from the mortgage at that time.
As far as affording the mortgage, I've been paying £200-£250 more a month for the last 4 years than the suggested payments will be. Granted, the risk factor is in the interest rates, but there is room for error if we were attempting to buy the cheapest place in our range, rather than the most expensive.
As far as affording the mortgage, I've been paying £200-£250 more a month for the last 4 years than the suggested payments will be. Granted, the risk factor is in the interest rates, but there is room for error if we were attempting to buy the cheapest place in our range, rather than the most expensive.
craigjm said:
You cant just remove her on a remortgage, you would in essence have to "buy her out" even for no cost and there would be a legal piece of work to be done to remove her from the deeds. It isnt like having a named driver on your insurance!
She'd only have to be bought out if she had an interest in the property.Having said that, I've no idea if the two things (the mortgage and the ownership of the property) could be dealt with separately.
Deva Link said:
She'd only have to be bought out if she had an interest in the property.
Having said that, I've no idea if the two things (the mortgage and the ownership of the property) could be dealt with separately.
She has an interest in the property legally if she is named on the mortgage regardless of whether she is paying anything and therefore mortgage and ownership cannot be dealt with separately. Having said that, I've no idea if the two things (the mortgage and the ownership of the property) could be dealt with separately.
The biggest risk to what this guy wants to do (although i guess he wouldnt want to think about it) is that if he dies then his sister would own the house not his wife or girlfriend.
My advice would be to try another mortgage company and see if you can get enough to go it alone using the evidence you have that you are alreadying paying more.
craigjm said:
You cant just remove her on a remortgage, you would in essence have to "buy her out" even for no cost and there would be a legal piece of work to be done to remove her from the deeds. It isnt like having a named driver on your insurance!
The Tax man would want the stamp duty (if her half is above the stamp duty threshold) when she transfer her half to you/your wife.Gassing Station | Finance | Top of Page | What's New | My Stuff