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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I am buying a house with my partner but I am not going to be

Customer Question

I am buying a house with my partner but I am not going to be on the mortgage as I am providing the deposit. I do however want to be included on the deeds. My partners building society have said that I must obtain independent legal advise.......can you give it please
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask if it is your wish not to be a party to the mortgage please or if you have been told you are not allowed to be a party to the mortgage?

Joshua :

Which lender is involved?

JACUSTOMER-ht99l7e6- : I do not wish to be a party firstly because I am 57 years old and I was told that the mortgae would have to run for only 10 years and secondly because I am putting up my half of the money as the deposit although I have to gift him this The amount of the mortgage is £40,000 and I am putting the same up as cash from a recent inheritance. The mortgae is with HSCB. My partner is going to borrow over 25 years
Joshua :

Thanks.

Joshua :

From what I understand from the above, the mortgage lender has advised that they require the deposit to be a gift in these circumstances. Have I understood that correctly?

Joshua :

Would you like to continue?

JACUSTOMER-ht99l7e6- : I am waiting for my partner to clarify whether or not HSBC have insisted upon my money being a gift. Sorry but we are at work and it's not always easy for us to communicate
Joshua :

No problem - just post back to this thread when you would like to continue.

JACUSTOMER-ht99l7e6- : Yes. I must gift him my half as the deposit
JACUSTOMER-ht99l7e6- : Can you please give me advise about this matter
JACUSTOMER-ht99l7e6- : Hello?
Customer: replied 2 years ago.
Relist: Incomplete answer.
Please answer my original question
Customer: replied 2 years ago.
I have still not received a reply to my question ?? Please help as it's very important to me
Expert:  Joshua replied 2 years ago.
Hello
I have been going through some older questions and noted the above. I apologise for the delay in responding to you. Looking at the above I was waiting for you to come back to me with information relating th HSBC and gifting. I note you have clicked "relist" on 30 March. Unfortunately this relists the question for others and does not notify me so I did not see that you had posted anything further.

Are you able to let me have the above information? If so I would be delighted to continue to assist if it is not too late.
Customer: replied 2 years ago.
I have still not received a reply to my question ?? Please help as it's very important to me
Customer: replied 2 years ago.
i have attempted to reply to your question about HSBC. Yes they want my deposit to be treated as a gift to my partner
Expert:  Joshua replied 2 years ago.
Thank you. What you propose is difficult. Most lenders require that borrowers under the mortgage are the same persons as are named on the title deeds. In other words most lenders will not allow you to be named on the title if you are not also a borrower under the mortgage.

HSBC used to be one of the rare exceptions which did allow different borrowers to named title owners but I am not certain if they still allow this as I have not seen it allowed for a couple of years. The question can be asked of HSBC.

However even if they do the significant issue you have is if HSBC require you to gift your deposit to your partner as a condition of the mortgage - which would be normal. If this is a requirement then being named on the title deeds would be of little value because you have gifted the money being your deposit to your partner. In other words you might be named on the title as a legal owner but your partner would own all te equity in the property and could therefore force a sale.

Essentially what you propose is very risky from your perspective and you place all your trust in your partner in doing so. He could legally keep the deposit you gift to him (because you made a gift of it to him - it does not matter that you only do so as a condition of the mortgage; if you do so the money you gift is no longer yours but belongs to him).

The only safe way to proceed is to either a) find a lender that is prepared to lend without a condition of a gift being made of your deposit. There are very few lenders that will lend under these conditions because technically in law what you have here is a property subject to a trust - you could contact a broker to see if there are any such lenders presently on the market who will agree to this or b) become a joing borrower under the mortgage. This would allow you to be named on the title deeds and more importantly allow you to protect your deposit by asking your solicitor to note a simple trust detailing what proportions of the equity you each own in the property.

I appreciate you prefer not to be a borrower under the mortgage but there are very few if any mainstream lenders that will agree to you being named on the title but not being a borrower or who will agree to you retaining an interest in your deposit. My view would be that it is therefore far safer for you to be a joint borrower under the mortage otherwise you will likely be forced into a situation by the mortgage lender where you are effectively made to place all your trust in your partner which if things were not to go as planned could leave you without a home (as you would have no right to live there without your partners consent if he is the owner) and without your deposit.

Does the above answer all your questions or is there anything I can clarify or help you with any further?
Customer: replied 2 years ago.
Our problem is my age. I am 57 and therefore they will only lend to both of us for a period of 10 years not 25. It's ok. I will have to trust him and give him my money and let the property be in his name! Can we have the property put in both of our names at a later date?
Expert:  Joshua replied 2 years ago.
You might like to speak to a mortgage broker. Theyhave access to a wider range of lenders and may be able to find a more suitable product that better fits your needs.

There is nothing stopping you transferring the property back into joint names at a later date but you would need permission from the lender to do so or to remortgage.

As an alternative what you could do is having completed the mortgage with HSBC, attend a different solicitor than the one that acted for HSBC in the mortgage and ask about alternative solicitor to prepare a simple bare trust deed which sets out that although your partner is the legal owner, he owns an agreed percentage of the equity in trust for you. There is a risk that he may refuse to do so once the transaction is completed but providing he is so willing, the preparation of a simple bare trust along the above lines will provide the although you are not a legal owner on the title deeds, you have an equitable interest in respect of the money you have invested which is enforceable in law.

Has the above answered your questions satisfactorily?
Expert:  Joshua replied 2 years ago.
Can I help you with anything else on the above or has the above answered your questions satisfactorily?