Being added to a mortgage - Solicitor Fees

Martynt74 · 28 Jul 2017 at 18:21

The house is currently in my wife's name as is the mortgage.

We have just remortgaged which was fine in her name, however we're looking to release some equity to lend to my parents whilst they're in between houses.

I've spoken to First direct who've said that it's fine but I need a solicitor letter to confirm I'm happy to not be on the deeds yet liable for payments.

I don't really want to go on the deeds due to unnessecary legal and land registry costs.

Anyone have any experience of this and the rough costs involved?

Skillmister · 28 Jul 2017 at 18:42

Sounds sketchy and I can't see a solicitor being willing to sort anything like that out unless for an existing client and a known quantity about property etc.. I know we wouldn't.

Don't really see what the "solicitor letter" is even for. You're remortgaging into joint names on the charge but not on the deeds? So surely you're liable for payments anyway because of the mortgage terms?

Martynt74 · 28 Jul 2017 at 18:42

As a side note. Does anyone know if there's a limit on bringing cash into the country?

They're wondering whether it's worth transferring money from accounts elsewhere instead, although they don't want any hassle with paperwork.

Can you transfer say £40k from multiple foreign accounts to the UK with minimal drama? He's worked all over the world so has always just been paid in local currency and had local accounts for payments.

Martynt74 · 28 Jul 2017 at 18:44

Skillmister said:
Sounds sketchy and I can't see a solicitor being willing to sort anything like that out unless for an existing client and a known quantity about property etc.. I know we wouldn't.

Don't really see what the "solicitor letter" is even for. You're remortgaging into joint names on the charge but not on the deeds? So surely you're liable for payments anyway because of the mortgage terms?

Yeah, I'm not really sure what it's needed for. I'm aware of the risks and that I'm liable for payments without having any claim to the property.

Maybe I'll ring a few other providers to ask the question. Don't really want to go through a broker as the fee wouldn't be worth it for a fairly small sum.

Edit - I imagine it's to stop people borrowing money against a house they don't own but surely this scenario must be fairly common.

Slam62 · 28 Jul 2017 at 18:47

This whole thing sounds weird

Martynt74 · 28 Jul 2017 at 18:54

It sounds odd but it's all very legit

My wife bought the house only very soon after we got together so was reluctant to put me on the deeds as she was putting in a big chunk of money in.

Never had any need to add me or involve me up until this moment.

My parents have a house here that they are selling as they live in Spain mostly. They've seen another property they want to buy but it would involve all their uk based cash which they're reluctant to do as it leaves them with little safety. So they want to borrow a smallish sum which they'll pay off when their house sells.

My solution lets them do this with the smallest cost.

Skillmister · 28 Jul 2017 at 19:44

Basically I don't see any way around incurring costs. These costs are a side effect of remortgaging. I don't even see how you can avoid the costs seeing as a remortgage requires legal work and the updated charge will need to be registered against the property at the land registry, no different to if you were "added to the deeds" at the same time.

Martynt74 · 28 Jul 2017 at 20:10

i didn't realise those costs took place. In the past we've taken the fee free (well factored into the rate) option and then in our recent renewal we just changed the rate which didn't incur any additional fees.

Any legal work in the past has always been hidden within the rate so not sure why it wouldn't be the case now.

Skiddley · 31 Jul 2017 at 13:37

Marvt74 said:
It sounds odd but it's all very legit

They've seen another property they want to buy but it would involve all their uk based cash which they're reluctant to do as it leaves them with little safety. So they want to borrow a smallish sum which they'll pay off when their house sells.
.

So your parents don't want to use their money for their own property investment, due to perceived risk, but would like you to bankroll them instead?

Martynt74 · 31 Jul 2017 at 18:26

Just didn't want to tie up all their cash really whereas using some of my equity is easier and they can pay me direct.

Would probably work out well as I'd have got them to pay me more than the interest so I'd have been able to pay off more of my capital upfront.

Looks irrelevant now, they've had an offer at asking from an old guy who seems desperate so by all means it should go through.

Psycho Sonny · 1 Aug 2017 at 16:03

Marvt74 said:
As a side note. Does anyone know if there's a limit on bringing cash into the country?

They're wondering whether it's worth transferring money from accounts elsewhere instead, although they don't want any hassle with paperwork.

Can you transfer say £40k from multiple foreign accounts to the UK with minimal drama? He's worked all over the world so has always just been paid in local currency and had local accounts for payments.

lulz

if he doesn't know the answer to this. then i'm banking on the fact he's never paid tax properly on it.

Kemik · 1 Aug 2017 at 16:22

Marvt74 said:
Can you transfer say £40k from multiple foreign accounts to the UK with minimal drama? He's worked all over the world so has always just been paid in local currency and had local accounts for payments.

Has he paid tax on it all in the UK?

Martynt74 · 1 Aug 2017 at 16:26

No idea, he has his own accountant and i admit i'm not a tax accountant so what he's save in fees by having me do it i'm sure he'd lose much more by my lack of knowledge of loopholes!

Kemik · 2 Aug 2017 at 08:52

Marvt74 said:
No idea, he has his own accountant and i admit i'm not a tax accountant so what he's save in fees by having me do it i'm sure he'd lose much more by my lack of knowledge of loopholes!

It's something he needs to figure out, otherwise there is a tax charge.

booyaka · 2 Aug 2017 at 09:00

Without trying to sound negative - this sounds like your making a huge amount of work for you, when in reality, a bit of tax advice for your parents should sort things out and they use their own funds.

I can't see how all the hassle of your remortaging, fees, solicitors etc - to give you parents some short term funds, works out better than then doing it themselves.

If your parents have funds overseas, it depends on their domiciled status/residency status as to whether tax has been deemed to have been paid overseas on the earnings, or not.

Basics here - https://www.gov.uk/tax-foreign-income/overview

Psycho Sonny · 2 Aug 2017 at 13:39

Marvt74 said:
It sounds odd but it's all very legit

My wife bought the house only very soon after we got together so was reluctant to put me on the deeds as she was putting in a big chunk of money in.

Never had any need to add me or involve me up until this moment.

My parents have a house here that they are selling as they live in Spain mostly. They've seen another property they want to buy but it would involve all their uk based cash which they're reluctant to do as it leaves them with little safety. So they want to borrow a smallish sum which they'll pay off when their house sells.

My solution lets them do this with the smallest cost.

First of all you say she is your wife. So it doesn't matter who's name is on the deeds afaik. Your both entitled to half of the "marital" home. So your wife was being ignorant of the laws of marriage.

Also if your parents want a safety net. Then why don't they borrow more themselves? or they apparently have £40K in cash in other countries. Why not use that?

The way your doing it looks dodgy and any legit solicitor would tell you to do one.

Martynt74 · 2 Aug 2017 at 15:44

booyaka said:
Without trying to sound negative - this sounds like your making a huge amount of work for you, when in reality, a bit of tax advice for your parents should sort things out and they use their own funds.

I can't see how all the hassle of your remortaging, fees, solicitors etc - to give you parents some short term funds, works out better than then doing it themselves.

If your parents have funds overseas, it depends on their domiciled status/residency status as to whether tax has been deemed to have been paid overseas on the earnings, or not.

Basics here - https://www.gov.uk/tax-foreign-income/overview

Cheers, from the past i've found remortgaging to be pretty minimal hassle and thought it may be so this time also so would be a good option. Looks like it's not going to be straight forward given the complications of adding me into the equation.

As i mentioned above they've had an offer on their current property so hopefully things progress with that and they can use that to fund the new property without any additional fuss. I know they've been asked to pay a deposit which i thought was unusual but least they have the assets to pay that straight away.

Cheers for the advice though.

Martynt74 · 2 Aug 2017 at 15:45

Psycho Sonny said:
First of all you say she is your wife. So it doesn't matter who's name is on the deeds afaik. Your both entitled to half of the "marital" home. So your wife was being ignorant of the laws of marriage.

Also if your parents want a safety net. Then why don't they borrow more themselves? or they apparently have £40K in cash in other countries. Why not use that?

The way your doing it looks dodgy and any legit solicitor would tell you to do one.

She wasn't my wife at the time of buying the house, as i said she bought it when we first got together and we didn't know how it'd pan out. She's suggested multiple times about adding me but i don't really see the point, there's never been any benefit of doing so.

He did look at taking out mortgages against his other property but due to very sporadic income these days (he's 71) he was rejected from a couple of banks. I know he's got the money/assets so was comfortable with the risk of lending it him. He did get one offer but the arrangement fee was £2k, plus £400 broker fee, so that seemed a lot higher than i was expecting to pay.

Psycho Sonny · 2 Aug 2017 at 16:15

Marvt74 said:
She wasn't my wife at the time of buying the house, as i said she bought it when we first got together and we didn't know how it'd pan out. She's suggested multiple times about adding me but i don't really see the point, there's never been any benefit of doing so.

He did look at taking out mortgages against his other property but due to very sporadic income these days (he's 71) he was rejected from a couple of banks. I know he's got the money/assets so was comfortable with the risk of lending it him. He did get one offer but the arrangement fee was £2k, plus £400 broker fee, so that seemed a lot higher than i was expecting to pay.

Age doesn't make any difference if you have the income and assets to back up the borrowing. It's when you have low income or people with little assets it's an issue for banks. I know this because I know someone in their 60's who has taken out 2 large mortgages on top of their own humongous mortgage in the past couple of years.

If banks are saying no then he needs to save up the cash rather than borrow it elsewhere. If you do lend him the cash you could make up a contract which states it's borrowed against the property so if he doesn't pay you then you can put a charge for that amount on the property. I know someone who lent their cousin £200K for instance for the guys business and never made a contract for the guys home that he owned. His business ended **** up and now he can't legally get a penny out of him which obviously has left him in an awkward position.

Martynt74 · 2 Aug 2017 at 16:31

Balls to that, it's family. If i didn't trust him to pay me back i wouldn't bother in the first place. Plus unless all his properties become worthless overnight i don't foresee a point he wouldn't be much wealthier than me!

As i said, he did get an offer but the fee's seemed excessive and i believe it would work out cheaper for me to get it on his behalf. I don't want him wasting money when it's not needed.