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Joint mortgage, one name on deeds

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  • 11-02-2010 10:42pm
    #1
    tevion
    Registered Users Posts: 104 ✭✭


    Situation is as follows, I own a house and live in it.
    My fiancee wants to buy a house as well, because we work a good bit apart.
    She cant get enough on her own, but if I go on the mortgage with her, she will get enough from the bank to buy what she is looking for.
    The mortgage would be in both our names but the house would be in her name.
    She is a first time buyer.
    She will be living in her house and I will be living in mine and we will both pay our own mortgages.
    I presume she would be exempt from stamp duty, as she will still be treated as a first time buyer?
    Would there be any implications?


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    #2
    GerardKeating
    Registered Users Posts: 7,533 ✭✭✭GerardKeating


    tevion wrote: »
    Situation is as follows, I own a house and live in it.
    My fiancee wants to buy a house as well, because we work a good bit apart.
    She cant get enough on her own, but if I go on the mortgage with her, she will get enough from the bank to buy what she is looking for.
    The mortgage would be in both our names but the house would be in her name.
    She is a first time buyer.
    She will be living in her house and I will be living in mine and we will both pay our own mortgages.
    I presume she would be exempt from stamp duty, as she will still be treated as a first time buyer?
    Would there be any implications?

    If the Mortgage is in both name, then the deeds will be in both name, both parties must be first time buyers.


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    #3
    spockety
    Moderators, Education Moderators Posts: 5,450 Mod ✭✭✭✭spockety


    tevion wrote: »
    Situation is as follows, I own a house and live in it.
    My fiancee wants to buy a house as well, because we work a good bit apart.
    She cant get enough on her own, but if I go on the mortgage with her, she will get enough from the bank to buy what she is looking for.
    The mortgage would be in both our names but the house would be in her name.
    She is a first time buyer.
    She will be living in her house and I will be living in mine and we will both pay our own mortgages.
    I presume she would be exempt from stamp duty, as she will still be treated as a first time buyer?
    Would there be any implications?

    Yes. Talk to the revenue. If you are involved the purchase is liable to stamp duty. Anything else is tax evasion. Unless of course it's a brand new property.


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    #4
    tevion
    Registered Users Posts: 104 ✭✭tevion


    GerardKeating wrote: »
    If the Mortgage is in both name, then the deeds will be in both name, both parties must be first time buyers.

    Not true.
    The deeds can go in her name only, we have checked this.
    Its nothing got to do with tax evasion either, its just to get a larger sum from the bank.


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    #5
    Fozzie Bear
    Registered Users Posts: 1,178 ✭✭✭Fozzie Bear


    tevion wrote: »
    Not true.
    The deeds can go in her name only, we have checked this.
    Its nothing got to do with tax evasion either, its just to get a larger sum from the bank.

    I got similar advice from both a Bank manager and a solicitor. Mind you I'm not saying its legal or correct.

    Both of them also suggested we get a credit union loan for our deposit instead of actually saving it up. Did not take their advice thank God on either issue.


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    #6
    JoeyJJ
    Registered Users Posts: 3,663 ✭✭✭JoeyJJ


    tevion wrote: »
    She will be living in her house and I will be living in mine and we will both pay our own mortgages.

    The Bank will only give her what they think she can afford to pay, does she disagree with them? If interest rates go up and they will, will she be able to pay the Mortgage?


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    #7
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    The bank will not give you a mortgage in both names without having the deeds in both names. This is to cover their own ass in the event that you default but your fianceé doesn't.

    If you wait until you get married, then they'll do this but your fianceé won't be eligible for FTB status.

    Look for a new house in a fairly new, but not brand new, development (i.e. one with people living in it). You'll get a new house with no stamp duty at a rock-bottom price that you can even haggle on.


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    #8
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    guarantee her loan as opposed to been a joint application. Then she is still a first time buyer. wouldnt go down that path myself.

    If you are involved in the purchase then she isnt a first time buyer


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    #9
    JoeyJJ
    Registered Users Posts: 3,663 ✭✭✭JoeyJJ


    Would they give her more if she said she'd have a lodger? If so you could be her lodger, possible more tax implecations though.


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    #10
    spockety
    Moderators, Education Moderators Posts: 5,450 Mod ✭✭✭✭spockety


    Credit Union loans, lodgers, rent a room..

    WTF is this, 2006?

    Save your deposit, borrow what you can afford. *sigh*


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    #11
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    As spockety says, lending is so much tighter now that I'd say you'd be laughed out of the place if you mentioned "lodgers" or rent-a-room to a bank.

    Banks are no longer willing to lend on potential income, they will only give you what you can afford right now.

    Back in 2006, a bank could reasonably expect your income to rise 5% per year, the value of the asset to rise between 5% and 10% per year, and you would have no difficulty find a renter/lodger paying over the odds for a room if you had to.

    Now they expect that your income won't change for about five years, you run the very real risk of losing your job, the house you're buying will be in negative equity in a year's time, and you have no hope of getting a lodger at a reasonable rent.


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    #12
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    seamus wrote: »

    Banks are no longer willing to lend on potential income, they will only give you what you can afford right now.

    .

    It had better not be !!!!!

    Banks had better be looking at what you can afford in 18 - 24 months when rates are at normal levels.


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    #13
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    D3PO wrote: »
    It had better not be !!!!!

    Banks had better be looking at what you can afford in 18 - 24 months when rates are at normal levels.
    Well, the stress testing always went on, even in the good times, but (afaik) they tested against your future earnings as opposed to your current ones.


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    #14
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    seamus wrote: »
    Well, the stress testing always went on, even in the good times, .

    Id have to disagree there. You dont give somebody 6,7 even 8 times their salary and on the other hand say you stress tested them.

    That would be the ultimate Paradox


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    #15
    kmick
    Registered Users Posts: 3,375 ✭✭✭kmick


    I would not be going guarantor on any loan. What if ye break up and she loses the ability/desire to pay the mortgage. Stranger things have happened.


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    #16
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    tevion wrote: »
    Not true.
    The deeds can go in her name only, we have checked this.
    .

    you better check again, because Im pretty sure your wrong. If you go gaurantor then she can go on the deeds on her own. If you go joint mortgage applicaiton then you have to be on the deed aswell and your libel for stamp duty.

    Im assuming the bank wont accept you as a gaurantor anyway if you have your own mortgage as Im assuming you dont have the means to pay both.


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    #17
    istabrac77
    Registered Users Posts: 69 ✭✭istabrac77


    If you look at the tax legislation, it basically says as long as you do not contribute to the purchase of the property she can claim FTB.
    You cannot contribute to the deposit or mortgage nor can you split the deed.

    You can however go guarantor with your house, and if you do get married in future, just simply put property in both names which would have no tax implications.

    However, be aware if you ever break up and the house devalues, you as guarantor would become liable .....there is always a catch.


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    #18
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    OP have a read of this

    http://archives.tcm.ie/businesspost/2005/06/26/story5850.asp

    important part pasted below

    Anecdotal evidence has shown that often first and second-time buyers - either a parent and child, two friends or a couple where one person has bought a property before - borrow the money together for the new property, but only put one name on the deeds of the property to avail of the reduced stamp duty rates.

    The savings can be substantial. For example, take our cottage in Dublin 5 again and the bid of €317,500. As we already mentioned, a first-time buyer does not have to pay any stamp duty. However, a non first-time buyer will have to pay stamp duty of €15,875 (€317,500 @ 5 per cent), so there's a lot of money at stake.

    If a first-time buyer is purchasing the property with someone who already owns a property or has purchased a property before, then they are not entitled to avail of the reduced stamp duty rate.

    Last week, the Revenue Commissioners confirmed that if parents or other individuals who own or have previously owned a property before, help a first-time buyer to get on the property ladder by borrowing money with them to meet a mortgage, then the first-time buyer cannot avai l of the reduced stamp duty rates.

    This could mean substantial tax bills for first-time buyers if they are found to have done this.

    According to a recent Permanent TSB/ESRI house price survey, more than 40 per cent of first-time buyers bought second-hand property, so many first-time buyers could be facing a tax bill if they borrowed money for their property with anyone who has purchased a house before.

    The Revenue has made policy in this area clear for some time now. Last week's reports have just confirmed what some property solicitors had suspected for a number of months. A guidance note was issued to solicitors last month, warning them of what was and was not allowed when it came to first-time buyers and stamp duty.

    The note confirmed a Revenue policy document published on its website (www.revenue.ie) earlier this year.

    In the document, the Revenue says reduced stamp duty rates cannot be availed of if any money or borrowed money used in the purchase of the house was provided by someone who has purchased a property before.

    So this means that, even if the name of the first-time buyer is the only name appearing on the deeds of the house, they cannot avail of the reduced stamp duty rates if they received money from a non first-time buyer, or a non-first-time buyer is borrowing money to purchase the house.

    “To qualify for the relief, the entirety of the purchase monies, including any borrowings, must be provided by the first-time buyer,” according to the Revenue website.

    “Any person who provides part of the purchase monies or who is a party to any borrowings relating to such purchase, is also regarded as a buyer of the house and the relief will not be available unless that other person is also a first-time buyer.


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    #19
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    reading that it comes down to what are "borrowings" is the mortgage considered a "borrowing" I would think so which means even if your not on the deed your libel for stamp duty


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    #20
    sodaev
    Registered Users Posts: 17 ✭sodaev


    Hi Op,

    I think it would be madness to saddle yourselves with two mortgages as you prepare for married life together. The property market is in a state of chaos at the moment and prices are only heading south.

    Get your fiance to rent for now, it would be an absolute folly to buy now.


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    #21
    janet28
    Closed Accounts Posts: 11 ✭janet28


    JoeyJJ wrote: »
    Would they give her more if she said she'd have a lodger? If so you could be her lodger, possible more tax implecations though.

    no they dont take this into consideration for your abilty to repay at all. The banks used to allow your repayments to be over 50% of you monthly earnings but this is about 33% now. So if your take home is €1500, the max they will let you pay back every month is €500


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