Can a married person apply for a mortgage alone

mikefrommeath

Hi

Can a married person apply for a mortgage alone?

The reason is the other person has a poor credit rating.

Does anyone know the facts?

Thanks

Peregrinus

Is the mortgage for a residence which one spouse will buy and own but in which both spouses will live as a couple?

phormium

In theory yes but in practice no as most lenders insist on the family home mortgage being a joint mortgage.

If it was for a separate rental property for example then no problem applying in sole name.

mikefrommeath

yes, its the family home

mikefrommeath

I should have also mentioned that the current mortgage we have is in my wifes name (as she bought the apartment we are in now before we met)

So we are ready looking to top up in her name.

Peregrinus

mikefrommeath wrote: »

I should have also mentioned that the current mortgage we have is in my wifes name (as she bought the apartment we are in now before we met)

So we are ready looking to top up in her name.

Ah, that does make a difference.

The question is "will the bank advance your wife more money on the security of the mortgage that she has already granted them over the apartment which she owns?"

I'd be more optimistic of success on this one that I would about the prospect of getting a new loan to finance the purchase of a new property, secured by a new mortgage over that property.

If your wife had not married you, and was now looking to borrow more money on the security of her current mortgage, the bank would do all the usual things like look at the loan-to-value ratio (will the value of the property be adequate security for the current sum outstanding plus the new advance?) and whether your wife's earnings are adequate to enable her to make the repayments. Assume that, as a single woman looking purely to her own income, she could tick all the boxes. She would, in that sitaution, get the extra advance.

Right. In the real world your wife has married you. Does this change things?

The bank will have two concerns. First, the property over which they have a mortage is now a family home, which might complicate the matter of enforcing the security over it if that were ever necessary. But of course it's already a family home; they have that problem right now. But they might see the occasion of a new advance as an opportunity to address that problem by, e.g. requiring you to become a joint borrower. And of course you may not be acceptable as a joint borrower.

Secondly, is the risk of your wife defaulting increased by the fact that she has married a poor credit risk? The honest answer to this, from the bank's point of view, is yes, it is, because if you get into financial strife your wife may wish to assist you, and that could lead in various ways to her own situation becoming financially stressed. Again, that's alread the position and there isn't a great deal the bank can do about it, but it might make them think twice about increasing their exposure by lending her more money.

Neither of these are necessarily show-stoppers. All you can do is ask. This might be a situation where it's worth while talking to a mortgage broker, who may help you to put the best case, and may also be able to advise of a lender who would consider the case. The existence of an alternative lender might make the bank willing to accommodate your wife's request for a further advance rather than have her take her business elsewhere.

phormium

Unfortunately I don't think that is going to make a difference, even if the original mortgage is in her sole name I'd imagine they will look for the top up mortgage to be in joint names as you are now married and depending on amount of top up it may require a new mortgage anyway.

You can only but ask!

Mort5000

mikefrommeath wrote: »

yes, its the family home

This is almost exactly the scenario I've just been through.
Original mortgage was taken out for the family home in my name, before we were married.
The new mortgage earlier this year had to be, by law, applied for in both of our names.
Everything had to be in both names, except, ironically, the bank account from which the DD will be paid. They were fine that that was only in my name.

phormium

Don't think it is law that the mortgage on the family home must be in joint names, it's mainly bank policy as it makes life easier for them security wise.

Mort5000

phormium wrote: »

Don't think it is law that the mortgage on the family home must be in joint names, it's mainly bank policy as it makes life easier for them security wise.

I queried it multiple times because we really didn't want to go that route.
This is what the broker commented:
"Under the Family Law Act, married couples are obliged to apply jointly for a mortgage. It was included in the act to prevent a spouse from selling the family home without the other spouse’s consent."

Whether that's genuinely in law or not I didn't check.

phormium

Fairly sure it's not actually a law, it is recommended obviously and banks won't give a mortgage in sole names so no other options if getting a mortgage. That's probably where your broker was coming from.

It is true that spouse must consent to a mortgage but there is actually a procedure for doing that but it's simpler for banks to just get both on the mortgage as saves hassle down the road if they have to repossess and they are always thinking of worst case scenario!

Peregrinus

It works like this.

The bank gives you a loan. You grant a mortgage over property to secure the loan.

The mortgage over the property has to be granted by whoever owns the property; the owner is the only person who can grant a mortgage over property. You can't grant a mortgage over property that you don't own.

So, if a married couple own property jointly, they must jointly grant any mortgage over the property.

If the property is owned by just one of the spouses, then only that spouse grants the mortgage.

But, if the property is the family home, that spouse can only grant a mortgage with the consent of the other spouse (because, under the Family Home Protection Act, you can't sell, give away, etc, any interest in the family home without the consent of your spouse). So you will still need the other spouse to sign to agree to the granting of the mortgage.

Right. In this case the property belongs to just one spouse and the mortgage has already been granted (I assume, before the owner of the property got married, so no question of the other spouse's consent arose). Since a mortgage to a bank is always expressed to secure all sums due by the borrower to the bank, if the bank now lends more money that new advance will be secured by the mortgage already granted. The borrower doesn't have to grant a further mortgage over the same property.

So, in theory, the bank could simply lend more money to the spouse who owns the property, and that advance would be secured by the mortgage over the property that the bank already has.

But, as a matter of policy, banks may be reluctant to to this. If the lender is in fact now married, and if the property is in fact a family home, that has practical implications both for the likelihood of default and for the difficulties that could arise in enforcing the mortgage. So banks may well have a policy of not doing this, and instead insisting on a new mortgage, granted with the consent of the other spouse.

But if al the other spouse is doing is consenting to the mortgage, in theory the fact that he or she has a poor credit rating should not be an issue. The bank is not lending money to the other spouse; just to the spouse with a good credit rating.

But, as already noted, in practice the bank will be concerned about this, because if you are married to somebody with a poor credit history, that does increase the risk that you yourself may get into, or be dragged into, financial stress.

mikefrommeath

Thank you all for your input.

We are dealing with one of the main banks on this, and they are happy and ready to send our (my wife's) applicant to the under writer.

However, ready above we have little to no chance......
I will let ye know.

Ginger83

mikefrommeath wrote: »

Thank you all for your input.

We are dealing with one of the main banks on this, and they are happy and ready to send our (my wife's) applicant to the under writer.

However, ready above we have little to no chance......
I will let ye know.

Any luck

mikefrommeath

Hi all, just to update this.
We got the mortgage in my wife name and have just moved into our home.

Thanks for the advise.

lorri3

Sorry jumping on old thread, interested to know what bank you obtained approval with..thanks

Jim2007

Looks like the OP has not been active here for over two years, so you may not get a response. I suggest you start a new thread.

Donald Trump

https://www.boards.ie/discussion/comment/114510641#Comment_114510641

Family Home Protection Act 1976, Doesn't require that both take it out, but requires that it cannot be taken out by one spouse without the other's knowledge and consent. Well more correctly, if it is taken out without it, it is void as a result

Old thread. But in case anyone reads it anyway. I only noticed after posting.