Mortgage question re joint ownership

Domo · 13 May 2016 at 16:35

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?

Domo · 13 May 2016 at 16:40

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

Domo · 13 May 2016 at 16:59

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.

Domo · 16 May 2016 at 10:59

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

Domo · 31 May 2016 at 01:10

Update. So HSBC has stated they won't make any exceptions as we all suspected. Thought we'd give it a go since we've been a mortgage holder with them for 10+ years.

On my own I can borrow just over £400k, but when adding my partner with zero income that drops to £330k. The only way to get the amount required is to leave my partner off the mortgage and get a deed of trust drawn up. But she's not willing to do that and remains insistent on being named on the mortgage. I quote the mortgage advisor - "I must admit, you're not in the greatest position". Says it all. Wish my partner could see sense, in that a deed of trust is just as good as being on the mortgage - in fact it's better since she's not ever obliged to pay the mortgage but she is guaranteed to get half if or when we sell in the future! It's a win win.

Edit - it was HSBC who suggested the deed of trust.