Mortgage or personal loan

Househunter16

Hi, just want to get a bit of information. Myself and my partner were hoping to build a house. We currently live in her house, left by her parents, we now are thinking it would be a lot cheaper to modernised this house because it is in great condition and on a lovely site, the problem is money, I am the only one working in a full time job but the house is in herself name, I was hoping to borrow about 80k,so that probably means a mortgage and not a personal loan, would it be possible to get a mortgage in my name (or both of ours) and the house only in her name, appreciate any advice, thanks.

No chance. The bank would not be able to sell someone else's house to repay your loan.

Get some legal advice and put the house in both your names, then go for the mortgage.

You have acquire rights to the house after living there as a couple after a few years anyways, shorter if there are children involved..

bilbot79

Loan of 80k to do up house in her name. I can hear the solicitor now. Mrs X claimed that he 'gifted' her the money

Peregrinus

In theory it's possible for you to take out a loan, for her to guarantee it, and for her to secure her guarantee with a mortgage of her house. "Possible' in the sense of "not illegal".

In practice the bank will run screaming from such an arrangement, because of the unholy mess they will be caught in if you and she fall out. Which you won't, of course. But you might.

Pg633 is correct. The way you could achieve this is by putting the house in both your names, and then you jointly take out a loan secured with a mortgage over the house that you jointly own. Obviously this has consequences that go well beyond just getting a loan, so it's something that you'd each want to think carefully about.

Pg633 is incorect to say that you have acquired rights in the house after living there as a couple. Should you fall out, if you have been together for long enough then a court could grant you some interest in the house, but whether they would or not will depend on the facts and circumstances at the time. And, unless and until the court does that, you have no interest in the house (unless she sells or gives you a share in it, of course).

Househunter16

Thanks for the replies, so it's get married or try an get both names on the house, would this cost much in tax, it's hard to get on in this country.

Peregrinus

If you marry, a transfer of a half-share in the house to you will cost nothing in stamp duty or CGT, though there will be legal and registration fees involved. If you remain unmarried then stamp duty and CGT kick is as well. There isn't enough information in the OP to estimate how much might be involved.

On edit: scratch the bit about CGT. Married or not, on the assumption that the house has been her principal residence since she inherited it, your partner will have no liablity to CGT when she disposes of the house, or a share in the house.

Stamp duty will apply, if you are unmarried. The stamp duty is your problem, not hers, though in the end of the day that probably doesn't make a huge difference. If you're borrowing money on the house you can borrow an additional sum to cover the stamp duty.

Househunter16

Thanks for that, wonder how much the stamp duty would be, impossible to say I suppose. It's 1950s house, in great condition, worth I'm guessing around 80k,is the stamp duty calculated on the value of the house.

368100

Joint mortgage sole title is possible...at least with BOI, but theyll need a very good reason for it and theres additional waivers to sign by the borrowers

Peregrinus

Househunter16 wrote: »

Thanks for that, wonder how much the stamp duty would be, impossible to say I suppose. It's 1950s house, in great condition, worth I'm guessing around 80k,is the stamp duty calculated on the value of the house.

It's calculated on the value of the half-share being transferred. For an interest worth less than €1m, stamp duty would be 1%.

Oh, wait. Gift tax. She's making a gift to you, and you're not related, so gift tax is likely to come into play.

Maybe you should buy the half-share from her, so no gift tax, and she rather than you spends the purchase price on doing the place up. (And of course you will borrow the purchase price, and secure the borrowing with a mortgage on the jointl-owned, newly-improved property.

Or you could just marry. Not that I would suggest that anyone should marry purely for tax reasons but, you know, it looks like marriage secures you the tax treatment appropriate to your relationship.