Mortgage question re joint ownership

Soldato
Joined
11 Feb 2004
Posts
4,532
Location
Surrey, UK
We're looking to buy a new house. Since moving into our existing house 10 years ago, we started a family and my partner (we're not married) gave up work.

When using mortgage calculators to see how much we can borrow, the amount is significantly reduced if I add my partner as joint owner (with zero income).
If I instead add her as a dependent, along with our daughter - the amount surpasses what we actually need to borrow and all is good.

She wants to be joint owner (else her name doesn't appear on the deeds) for obvious reasons, security being the top one.
Is the same thing likely to happen when we speak to the bank? Or can they recognise why we're doing this? Is there something legal we can do or obtain in the event she can't go on the mortgage?
 
Soldato
OP
Joined
11 Feb 2004
Posts
4,532
Location
Surrey, UK
Thanks - although I know what the different types of ownership involve legally. The question is around adding my partner to the mortgage with zero income. Can I negotiate with the bank to borrow as if I'm applying on my own? Suppose the best thing to do is call the bank :)
 

SPG

SPG

Soldato
Joined
28 Jul 2010
Posts
10,230
No problem with joint mortgage, just have an agreement set up regarding % on splitting with your partner.

In hindsight it was one of the best things I ever did. Protect yourself and your children everything else is dirty laundry.
 
Soldato
OP
Joined
11 Feb 2004
Posts
4,532
Location
Surrey, UK
Even though she's not contributed for 8 years, she did pay the initial deposit of £30k, so beyond security she has a tangible (and valid) interest. I can also see her point about security - not being on the deeds leaves her vulnerable, especially as we're not married and that's something I would prefer to avoid. No single reason - just not something I'm a fan of generally.
 
Man of Honour
Joined
26 Dec 2003
Posts
30,837
Location
Shropshire
A deed/Declaration of trust is what you want if you can't work out a way to get her as an owner on the mortgage without losing out on a chunk of cash.
 
Caporegime
Joined
29 Jan 2008
Posts
58,898
Even though she's not contributed for 8 years, she did pay the initial deposit of £30k, so beyond security she has a tangible (and valid) interest. I can also see her point about security - not being on the deeds leaves her vulnerable, especially as we're not married and that's something I would prefer to avoid. No single reason - just not something I'm a fan of generally.

Well you need to be up front about that with the mortgage broker and lender

you probably should speak to a solicitor about drawing up an agreement re: equity though, I mean if she's contributed some deposit 8 years ago to your existing house then she'll want an appropriate percentage but I'm not sure you'd want it to be 50/50 if you ending up paying significantly more than her
 
Associate
Joined
10 Sep 2008
Posts
1,620
I'm in pretty much the same position as you, in the end had no choice but to go for mortgage/deeds in my name. She can go on at a later date when shes earning again, obviously be some legal fees to pay at that point. I know its annoyed my wife, left her feeling a bit of a non person in the house purchase, her name might not be on the deeds but its her house!
 
Associate
Joined
9 Apr 2016
Posts
127
Location
North East England
No you can't.. If she's on the deeds she must be party to the mortgage.

Think about it from the lender's point of view, the legal implications and constraints put on them should you decide not to pay your mortgage are horrendous. Also, you cannot class her as a dependent. She will be classed as another adult living at the address and will have to sign a deed of postponement which specifically precludes her from any claim on the property.

Every lender is different, they will treat your circumstances differently and they all calculate affordability differently, that is where the skill and experience of a good broker comes in... knowing who to look at and who to avoid!

If you want some help drop me a line... [email protected]

Paul
 
Last edited:
Associate
Joined
27 Feb 2014
Posts
2,132
No you can't.. If she's on the deeds she must be party to the mortgage.

Think about it from the lender's point of view, the legal implications and constraints put on them should you decide not to pay your mortgage are horrendous. Also, you cannot class her as a dependent. She will be classed as another adult living at the address and will have to sign a deed of postponement which specifically precludes her from any claim on the property.

Basically as above, mortgage in my name wife had to sign a doc not to make a claim on the property in event of non payment of mortgage/ my death / other circumstances.

And until the mortgage is paid off the lender is the ultimate owner....
 
Soldato
OP
Joined
11 Feb 2004
Posts
4,532
Location
Surrey, UK
Thanks Vipa66. I had been trying to determine exactly what the risk to the lender is, but having read that its obvious. Being named on the deeds while not legally obliged to pay the mortgage would be absurd.

So I guess its down to our existing lender. We had to sign another 2 year fixed rate a couple of months back which comes with a huge redemption fee if we cancel early. However they did say we could transfer the rate if we stick with them (it's a great rate too at 1.74%).

If it wasn't for these factors we'd shop around since apparently some lenders treat these situations differently.

/edit - I've saved your email address! Appreciate the help :)
 
Associate
Joined
9 Apr 2016
Posts
127
Location
North East England
Thanks Vipa66. I had been trying to determine exactly what the risk to the lender is, but having read that its obvious. Being named on the deeds while not legally obliged to pay the mortgage would be absurd.

So I guess its down to our existing lender. We had to sign another 2 year fixed rate a couple of months back which comes with a huge redemption fee if we cancel early. However they did say we could transfer the rate if we stick with them (it's a great rate too at 1.74%).

If it wasn't for these factors we'd shop around since apparently some lenders treat these situations differently.

/edit - I've saved your email address! Appreciate the help :)

No problem at all.. always glad to help :)

1.74% isn't bad at all, in fact it's very good, so you can rest easy you have a decent rate. The product should be portable (very few aren't nowadays) meaning, if you do decide to move in the next 2 years, you can take the product with you and top up either on a product they have available at the time or on their variable rate, either way, you won't pay any penalties. Obviously, you will be limited to the banks affordability calculations.

Once you are out of penalties feel free to give me a shout and I'll have a look at some options for you.

All the best
Paul
 
Soldato
Joined
21 Apr 2011
Posts
3,119
There is actually one lender (that I know of) that will do a mortgage on a joint proprietor sole borrower basis (indirect security). This lender rather oddly is also one of the most strict lenders on the high street and I was amazed when I found out they offered joint proprietor sole borrower, but it can be done. That doesn't mean you should though and of course would be subject to underwriter approval. I don't know how they would treat the non-borrower in terms of affordability, so it might not even help your situation as they may still just apply the same affordability rules (and I suspect this would probably be the case).

Deed of trust as mentioned is an option, but then that also shuts the door for some lenders too. You should for sure seek some advice from a professional broker.



Paul - Don't mean to be a party pooper and I know you are trying to help, but promotion of your business is not allowed on this forum and I have noticed your business email address cropping up a couple of times now..... Just a heads up:

"No promotion of business interests
You may not promote any website or business you have a financial or other interest in, or use the popularity of this community to help build one of your own. The forums are here to allow people to freely share knowledge, not provide them with personal financial gain, or free advertising."
 
Last edited:
Back
Top Bottom