Joint Mortgage & Single Ownership

eoin317

Hi,
I am helping my brother to buy a house and we have gotten approval in principle from the bank for a joint mortgage and a good amount. I am a current homeowner so we have started talking to solicitors as what we want to do is have the mortgage in both of our names and the deeds of the house solely in my brothers name.
One solicitor has advised us that we will have to inform the bank of this which makes me worried that they will see this as an issue. Do we have to tell the bank this information and if so, will they care?
Thanks

lawred2

Fairly sure most Banks world baulk at an arrangement like that.

The bank hold the deeds until the mortgage is repaid anyway.

wally79

eoin317 wrote: »

Hi,
I am helping my brother to buy a house and we have gotten approval in principle from the bank for a joint mortgage and a good amount. I am a current homeowner so we have started talking to solicitors as what we want to do is have the mortgage in both of our names and the deeds of the house solely in my brothers name.
One solicitor has advised us that we will have to inform the bank of this which makes me worried that they will see this as an issue. Do we have to tell the bank this information and if so, will they care?
Thanks

I would have thought that if your name is on the mortgage it will also need to be on the title. Otherwise what security does the bank have if you fall into arrears

Glass fused light

eoin317 wrote: »

Hi,
I am helping my brother to buy a house and we have gotten approval in principle from the bank for a joint mortgage and a good amount. I am a current homeowner so we have started talking to solicitors as what we want to do is have the mortgage in both of our names and the deeds of the house solely in my brothers name.
One solicitor has advised us that we will have to inform the bank of this which makes me worried that they will see this as an issue. Do we have to tell the bank this information and if so, will they care?
Thanks

You will be filling in and signing documents and the bank get sent the deed so the bank will be aware of the house being in one name only.
As for caring are you currently in negitave equity as are you aware that you are betting your house on your brothers ability to pay the mortgage.

Glass fused light

lawred2 wrote: »

Fairly sure most Banks world baulk at an arrangement like that.

The bank hold the deeds until the mortgage is repaid anyway.

The bank won't have issue as both parties owe 100% of the money back to the bank and the house can be reclaimed by the bank with an additional opton to go after the OP's home too.

eoin317

lawred2 wrote: »

Fairly sure most Banks world baulk at an arrangement like that.

The bank hold the deeds until the mortgage is repaid anyway.

Why do you think they would baulk at it? I asked the solicitor would this be a condition from the bank that the mortgage is in joint names so the deeds must be in joint names and they didn't know. 
We will move forward with the mortgage one way or the other, I just want to make it as clean and simple as possible...

eoin317

Glass fused light wrote: »

eoin317 wrote: »

Hi,
I am helping my brother to buy a house and we have gotten approval in principle from the bank for a joint mortgage and a good amount. I am a current homeowner so we have started talking to solicitors as what we want to do is have the mortgage in both of our names and the deeds of the house solely in my brothers name.
One solicitor has advised us that we will have to inform the bank of this which makes me worried that they will see this as an issue. Do we have to tell the bank this information and if so, will they care?
Thanks

You will be filling in and signing documents and the bank get sent the deed so the bank will be aware of the house being in one name only.
As for caring are you currently in negitave equity as are you aware that you are betting your house on your brothers ability to pay the mortgage.

The bank will know fairly quickly about it alright as they hold the deeds. I would prefer to be the one to back my brother rather than my elderly parents. He is buying in a good area and just needs a bit of help so I am happy to do it.

Glass fused light

eoin317 wrote: »

The bank will know fairly quickly about it alright as they hold the deeds. I would prefer to be the one to back my brother rather than my elderly parents. He is buying in a good area and just needs a bit of help so I am happy to do it.

In that case I would look to secure your risk and make sure that the life insurances policy is in place for the full term and both of you get seprate correspondence from the bank as there has been issues with only the first name on the mortgage getting correspondne. You should also have a discussion on worst case scenario and think about a power of attorney so that you could deal with the bank on his behalf if he was not able or if he gets married.

phormium

You need to tell the bank, they may or may not have a problem with it, it will depend on that bank's own policies. Otherwise it will arise at a later stage and could affect your mortgage drawdown and scupper the whole thing.

This was not uncommon back in the boom where you would have a parent on the mortgage to help with borrowing the amount needed but the deeds would be in a sole name. Banks not as fond of that situation these days but as I said it will depend on the individual bank and their rules.

Independent legal advice is always advised for the non deeds party as they are having all of the disadvantages of debt with none of the advantages of ownership so need to be fully aware of what they are signing up for.

lawred2

Is this not effectively going guarantor? I don't think banks are overly disposed to that after the 'boom'

Glass fused light

lawred2 wrote: »

Is this not effectively going guarantor? I don't think banks are overly disposed to that after the 'boom'

No as far as i am aware if noone was in a position to make payments, with a guarantor, to recover the full monies loaned, effectively the bank would have to go through the legal process of repossession and selling the house and still have a shortfall before they could begin and succeed in a legal action against the OP.
In the OP's case as they would be joint and separately liable the bank could cover the likely shortfall in the same court action and register a charge against the OP's home.

phormium

Not the same as guarantor, joint mortgage holder is much more security for the bank, easier to chase!

wally79

phormium wrote: »

Not the same as guarantor, joint mortgage holder is much more security for the bank, easier to chase!

If they have anything worth chasing.

phormium

Same applies to any mortgage applicant you could say, bank are giving loan based on income, if either party loses their income then that's the same risk the bank is taking with every mortgage.

Marcusm

phormium wrote: »

Not the same as guarantor, joint mortgage holder is much more security for the bank, easier to chase!

Not necessarily if it’s not done properly. Guarantees are executed as deeds and enforceable on their own terms. Where a borrower is not an owner of the asset it is possible to assert that they did not benefit from the loan. This is avoided through using a deed of guarantee.

phormium

Possibly, but banks aren't interested in anything complicated and want a nice straight forward joint mortgage holder Only ever saw a few genuine guarantor situations and then policies changed to joint mortgage holder or nothing.