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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.
May I ask if you obtained your mortgage through a broker or direct through the bank please?
Would I be correct to presume that the bank are refusing to lend to your husband given his status until he has 2 or 3 years of accounts behind him but nevertheless will allow him to be jointly named on the mortgage?
Hi, the mortgage is direct with the bank. The mortgage is in my sole name. He will not be jointly named on the mortgage due his employment status. I would like the house to be in our joint names however.
Thanks. From what you say the bank are agreeable to him being a joint owner of the property although they will not allow him to be a party to the mortgage?
Yes that is correct but they require him to obtain independent legal advice to ensure he understands what this would mean, presumably should I default on the mortgage in the future.
I'm not sure what we need to ask for - is our situation known as something in particular?
HSBC is relatively unusual in that it allows in certain circumstances different legal owners to borrowers under their mortgages. Most high street banks require (for policy rather than legal reasons) for legal owners to be the same as the borrowers.
There are two ways to deal with this situation. The first is by proceeding on the purchase in your sole name and then executing a simple bare trust after the event with your husband expressing that you own the property as to 50% for you and 50% for him. The second option is to have him as a joint legal owner which is the option you are presently exploring with the lender.
If you proceed with this option the lender will require your husband to confirm that he places his interest in the property behind the lenders in the event that the lender reposesses the property. This is to ensure that your husband cannot defeat the lender in their effort to repossess the property which otherwise he may be able to do as a joint owner. To ensure that your husbands interest is properly put behind the lenders it is necessary for the lender to show that your husband understood what he was signing when he agreed to do so. This is because there was a big case a few years ago where a wife signed something as proposed here and later claimed that she did not understand what she was signing and the lender was prevented by her from repossessing their property.
The lender will send a document for your husband to sign to say that he is content to put his interest behind the lenders in the event of repossession and will require that he visits an independent solicitor to sign this so they can explain the nature of the document he is signing and sign a certificate to confirm that they have given him this advice. This is a straightforward process but will require him normally to attend a local solicitor separate to that acting for the mortgage and will incur an additional fee. Not all solicitors will be willing to provide the above advice but many will.
Is there anything above I can clarify for you?
Is the procedure you describe called anything in particular so that when we contact a local solicitor we know what to ask for? We are concerned that unless we are very specific about what it is we need we may end up paying more than we need to?!
Yes. Some lenders call it a "Deed of Postponement" and others call it an "Adult Occupiers Consent". Solicitors will be familiar with both terms. HSBC have a very specific (simple) procedure they require followed and will on request send through documents for the chosen solicitor and your husband to sign. From memory they require a deed of postponement to be signed by your husband and the solicitor to first explain the nature of the document and then sign a certificate to confirm they have provided this advice to your husband.
Is there anything else I can help you with?
Thank you Joshua, you have been very helpful.
A pleasure. If I can assist any further as the situation develops please do no hesitate to let me know.
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