Property question

Page may contain affiliate links. Please see terms for details.

Satch

MB Enthusiast
Joined
Nov 24, 2003
Messages
3,508
Location
Surrey
Car
S211 E320Cdi Avantgarde Estate & Toyota Land Cruiser
Various reasons behind this but the time has come to ship children out to a property of their own.

No1 is recently graduated and not earning a great deal but is doing something that he wants to do and is obtaining some very good experience in the process. No.2 is still a sponging soap dodging student in his final year.

Going to put up a deposit of around 40% which enables access to low rates.

Lender will take both No.1's & my own income into account & not a problem there, but this property is for both of them, not an investment by me.

Sticking point is that lender in question will only allow 2 borrowers on the mortgage and they have to be the same as the owners on the title deed, again maximum of 2. I know other lenders are not so fussed but there are other factors which mean I would like to stick with them

So that is me and No.1 as legal owners/mortgagees and suggestion is that I execute a declaration of trusts so that:

Self & No.1 son clarify 50/50 legal ownership

I am holding legal ownership of "my" 50% share but execute another declaration of trust so that No.2 son is beneficial owner.

Sounds easy enough but....

Going to see my solicitor later in the week but anybody come across this?
 
I don't know, but... lenders like to know everything about the owners circumstances, so you may need to declare the trust arrangement with your son - your solicitor would probably know.
 
I don't know, but... lenders like to know everything about the owners circumstances, so you may need to declare the trust arrangement with your son - your solicitor would probably know.

I agree, plus don't forget the mortgagee (that's the lender, you are the mortgagor) always wants first charge, so any trust or private arrangements will rank below this.

You'll most likely have to declare if anybody (other than the mortgagors) aged 17 or over will be occupying the property, and they will have to postpone their rights to occupy in favour of the lender, in the event of default and the lender taking possession.
 
I'd say a deed of trust declaring ownership will appease the mortgage company.

You could then adjust your will to leave specific equity to each son as I assume this is only should you leave this mortal coil?

This assumes these sums aren't large enough to create inheritance tax issues.

I'm just buying 70% my mothers house after my father passed away and left them with a mortgage. Although I'm not mortgaging this, a Deed of trust is still drawn up and I think it's lodged with the land registry. Everybody is then happy.

Edit:-

Are you paying cash (or raising a mortgage on your own home) or mortgaging your part of each of the kids homes?
 
Last edited:

Users who are viewing this thread

Back
Top Bottom