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Matt Jones
Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience:  I am a qualified and practising Solicitor with over 7 years post qualification experience
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How does it work when you plan to buy a house - that includes

Customer Question

How does it work when you plan to buy a house - that includes my mother in law, my husband and i with the following scenario:-
Mother in law is selling her home (she is a widow now) and the 3 of us are buying a house together. We are in rented currently and the new home will be shared between the 3 of us with my husband and i running the mortgage - and the deposit will be coming from the sale of mum's house. I presume (and hope) there are no issues in having 3 people on the deeds when 2 are paying the mortgage? Or would the 3 of us just go on the mortgage even though mum isn't contributing towards it?
Submitted: 1 year ago.
Category: Law
Expert:  Matt Jones replied 1 year ago.
Hi I will try and help
Expert:  Matt Jones replied 1 year ago.
Will the mortgage you take be a standard mortgage from a "high street lender"?
Customer: replied 1 year ago.

Hi Matt, Yes it will be a high street lender.

Expert:  Matt Jones replied 1 year ago.
Thanks. IN this case, most lenders of this type would not allow a person to sit as a named party on the title deed without also being a named party on the mortgage as well. The reason for this is that things get rather complicated for them if, for example, they had to repossess and sell the property as they would effectively be a joint owner with your mum and would struggle to gain control. Is your mum able/willing to be a named party on the mortgage anyway, even if you are the paying parties?
Customer: replied 1 year ago.

Hi Matt, Yes, we feel sure she will have no issues with that. We just didn't know how documentation would be set out against her part in it as the deposit person ...and my husband and i paying out the mortgage repayment.

I completely understand your response in how this is dealt with from the lenders point of view. Is there anything else we need to be aware of ?

Expert:  Matt Jones replied 1 year ago.
As a legal owner you will be soon as jointly owing the property. However you can agree to own the "beneficial interest" (that is the equity or value left over once the mortgage is repaid) in the property is different shares. To do that you would own the property in what we call "Tenant in common". This would require s deed of trust drafting, which is fairly straightforward and your solicitor should be able to do. You can then own the equity in the property in shares such as 30% you, 30% hubby, 40% mum, for example. Alternatively have a mechanism where, for example, mums deposit is paid back , and then the equity is split between you and hubby equally.
Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience: I am a qualified and practising Solicitor with over 7 years post qualification experience
Matt Jones and other Law Specialists are ready to help you
Expert:  Matt Jones replied 1 year ago.
Hopefully I have helped. If so kindly leave positive feedback so I can be paid for my time. the question wont close and if you have any follow up question late you can always post
Expert:  Matt Jones replied 1 year ago.
Sorry just realised the first sentence of the last but one post make no sense - I meant to type "As legal owners you will be shown as jointly owing the property on the legal title"
Customer: replied 1 year ago.

Thats ok Matt. This has been really helpful, thanks ever so much

Louise.

Expert:  Matt Jones replied 1 year ago.
No problem. All the best
Customer: replied 1 year ago.

Hi Matt,

It is with surprise that my husband has spoken to his mum about what we have discussed online and she has actually showed her concern over being included in the mortgage as she would worry what comeback there is on HER if we came into a situation where we couldn't pay the mortgage and she would hence be liable too. She is as you can imagine, a worried party that hasn't moved in 40 years! Is this where a deed of trust would settle her mind? Or...Does it get more complex than that?

Louise.

Expert:  Matt Jones replied 1 year ago.
Hi thanks. Well as a signatory to the mortgage it could leave her vulnerable if you don't pay, as the lender could come after any of you in that case. The deed of trust could still be used however. Essentially you and your husband would be the trustees, holding the property on trust for you both plus mum in whatever shares you wanted. She's wouldn't be named as a legal owner but the "trust" would still be binding on you to split the proceeds in that way on any sale.

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