Add wife to deeds but not to mortgage

touchdown77

A friend has asked is it possible to add a spouse to the title deeds of a PPR but not to the mortgage. Because he's self employed he doesn't want to go through the hassle of mortgage application etc



(He's aware its not strictly required but wants the wife to be on the deeds to make inheritance more straightforward)



I told him that it couldn't be done because it would effect the banks security over the house buuuuuutttttt..... maybe I'm wrong so best I check here....

hullaballoo

Well, it can be done but as you rightly point out, it would have to be done with the bank's consent as it affects their security.

That said, you don't know what the bank's attitude will be until you ask them.

cobhguy28

hullaballoo wrote: »

Well, it can be done but as you rightly point out, it would have to be done with the bank's consent as it affects their security.

That said, you don't know what the bank's attitude will be until you ask them.

How would it affect the bank's security. The bank would already have the first legal charge, so it would make no difference as to whose name is on the title.

phormium

Bank's permission will have to be sought as they have the deeds anyway but whether they will allow it or not is down to the individual banks policies. Back in the day pre bust it was not uncommon to have two names on mortgage but one on deeds, often a parent, but the other way around was not allowed in bank I was familiar with anyway.

But I have seen on an FB building forum that some banks do allow it in some circumstances so will only have to ask.

BTW I don't think he would have to go through the whole hassle of a new mortgage application just to add a name, his wife would have to fill in forms, produce id etc but it shouldn't need a new mortgage.

cobhguy28

phormium wrote: »

Bank's permission will have to be sought as they have the deeds anyway but whether they will allow it or not is down to the individual banks policies. Back in the day pre bust it was not uncommon to have two names on mortgage but one on deeds, often a parent, but the other way around was not allowed in bank I was familiar with anyway.

But I have seen on an FB building forum that some banks do allow it in some circumstances so will only have to ask.

90% of homes don't have deeds anymore. It is all just kept on electronic register.

L1011

cobhguy28 wrote: »

90% of homes don't have deeds anymore. It is all just kept on electronic register.

Far less than 90% of folios are registered in the counties where it was brought in later. And anyway, adding someone to the ownership on a folio is still going to require the banks assent as the holder of a charge over it.

Peregrinus

touchdown77 wrote: »

A friend has asked is it possible to add a spouse to the title deeds of a PPR but not to the mortgage. Because he's self employed he doesn't want to go through the hassle of mortgage application etc

(He's aware its not strictly required but wants the wife to be on the deeds to make inheritance more straightforward)

I told him that it couldn't be done because it would effect the banks security over the house buuuuuutttttt..... maybe I'm wrong so best I check here....

You are correct. The owner won't be able to transfer a half-share in the house to his wife without the approval of the bank, and the bank won't approve it unless she also becomes a joint borrower on the loan, which will require her to be approved as a borrower.

If he hasn't already, he should (a) make a will leaving the house to his wife, and (b) take out mortgage protection insurance so that, if he dies, the loan will be repaid by the insurance proceeds and the wife will inherit the house free of mortgage. (Otherwise she may have to sell the house to clear the loan to the bank.)

3DataModem

cobhguy28 wrote: »

How would it affect the bank's security. The bank would already have the first legal charge, so it would make no difference as to whose name is on the title.

It dramatically affects the banks security.

If he defaults on the loan and they want to execute the security (i.e. take possession) then they will find it a lot more difficult to claim an asset where a person unconnected to the loan has an ownership stake.

This gets more complex (from the banks POV) if the new party to the deeds has some other relationship with the bank... e.g. is a bank employee, is a director of a company with significant debt to the bank, etc.

So in short, a bank is very reluctant for people to give away portions of property to (from their perspective) strangers without them being burdened with the debt too!

There are protections in place for the family home where a couple live there (your solicitor can advise) but unlikely any bank would do what you want.

Also there is no inheritance taxes between spouses.
https://www.revenue.ie/en/life-events-and-personal-circumstances/death-and-bereavement/widowed-person-or-surviving-civil-partner/do-you-have-to-pay-tax-on-your-inheritance.aspx#:~:text=If%20your%20spouse%20or%20civil,to%20apply%20for%20this%20exemption.

joeguevara

What is the benefit to him doing so?

Peregrinus

"He wants the wife to be on the deeds to make inheritance more straightforward."

I think what's going on here is this: if he and his wife own the proprety as joint tenants, then on the death of one of them the survivor immediately and automatically becomes the sole owner of the entire property; no muss, no fuss. No need for tiresome, fiddly probate applications and the associated bother, delay and expense.

If the house is the only asset he owns of any significance, or if other assets - e.g. investments, bank accounts - are similarly put in joint names, it's even possible that if there is no need to extract a grant of probate to deal with the house then there will be no need to extract a grant of probate at all.

So, it may save his widow a deal of bother, basically.

joeguevara

Peregrinus wrote: »

"He wants the wife to be on the deeds to make inheritance more straightforward."

I think what's going on here is this: if he and his wife own the proprety as joint tenants, then on the death of one of them the survivor immediately and automatically becomes the sole owner of the entire property; no muss, no fuss. No need for tiresome, fiddly probate applications and the associated bother, delay and expense.

If the house is the only asset he owns of any significance, or if other assets - e.g. investments, bank accounts - are similarly put in joint names, it's even possible that if there is no need to extract a grant of probate to deal with the house then there will be no need to extract a grant of probate at all.

So, it may save his widow a deal of bother, basically.

If it’s to get around a will, then mortgage protection is going to pay off the mortgage and wife has asset. But bank have first charge and I’ve never seen them allow another to trump them. But what is benefit of wife on deeds otherwise? And what consideration from contract perspective is there going to be to get ownership of the asset.

If we’re not talking about death of spouse and he is incapable of paying the debt and spouse has no lien with bank, she could theoretically fight them for ownership of an asset that at present she has nothing to do with. For example, if husband goes missing, what are the bank to do?

Peregrinus

joeguevara wrote: »

If it’s to get around a will, then mortgage protection is going to pay off the mortgage and wife has asset. But bank have first charge and I’ve never seen them allow another to trump them. But what is benefit of wife on deeds otherwise? And what consideration from contract perspective is there going to be to get ownership of the asset.

If we’re not talking about death of spouse and he is incapable of paying the debt and spouse has no lien with bank, she could theoretically fight them for ownership of an asset that at present she has nothing to do with. For example, if husband goes missing, what are the bank to do?

It's got nothing to do with getting around a will, or with fighting the bank for the house. It's simply about avoiding the trouble, delay and expense of having to obtain a grant of probate to administer the estate. It won't change the final disposition of the estate in any way; it just offers the prospect of getting there more quickly and cheaply.

At least, that's the only possible benefit that I can think of. And it's what the OP suggests.

joeguevara

Peregrinus wrote: »

It's got nothing to do with getting around a will, or with fighting the bank for the house. It's simply about avoiding the trouble, delay and expense of having to obtain a grant of probate to administer the estate. It won't change the final disposition of the estate in any way; it just offers the prospect of getting there more quickly and cheaply.

At least, that's the only possible benefit that I can think of. And it's what the OP suggests.

Missed the middle bit about inheritance.

If that’s the case then mortgage protection will solve the issue with the loan. And a will bequeathing all assets to wife. Inheritance only really becomes complicated if it is contested or no will (usually both).

I remember a thread here recently on a husband getting a mortgage on an investment property and the advice was although legally possible due to an equality case setting precedent, lenders rarely underwrite it. Becomes even more unlikely after the fact.

Hannibal_Smith

The mortgage will contain a condition that the borrower cannot sell, transfer or otherwise alienate any of his interest in the property without the consent of the bank.

The consent of the bank is absolutely needed. The LR will not register without it.

joeguevara

Hannibal_Smith wrote: »

The mortgage will contain a condition that the borrower cannot sell, transfer or otherwise alienate any of his interest in the property without the consent of the bank.

The consent of the bank is absolutely needed. The LR will not register without it.

Depends on the mortgage terms and some investment properties have different terms but most are as you said.

Interesting thread from 7 years ago

https://www.boards.ie/vbulletin//showthread.php?t=2057021527&page=2 Albeit not completely the same

Hannibal_Smith

joeguevara wrote: »

Depends on the mortgage terms and some investment properties have different terms but most are as you said.

Interesting thread from 7 years ago

https://www.boards.ie/vbulletin//showthread.php?t=2057021527&page=2 Albeit not completely the same

I've never seen a mortgage deed without that condition.

ETA: that link has two posters in it. The original poster looking for advice re transferring without a mortgage. And the second looking to put a ROD title in joint names. That poster collected his deeds from the bank personally, which would suggest the mortgage was paid off and the bank were only holding them for safe keeping.

joeguevara

Hannibal_Smith wrote: »

I've never seen a mortgage deed without that condition.

Nor have I but I have heard from a colleague of one that was poorly drafted but big difference was the loan was only 15 or 20 percent of the purchase. From what he said, very little of it was enforceable and predated the btl boom.

Another thing that is common place is the misunderstanding of the difference between title and deeds. But I doubt the lender will allow what the op is suggesting.

Hannibal_Smith

joeguevara wrote: »

Nor have I but I have heard from a colleague of one that was poorly drafted but big difference was the loan was only 15 or 20 percent of the purchase. From what he said, very little of it was enforceable and predated the btl boom.

Another thing that is common place is the misunderstanding of the difference between title and deeds. But I doubt the lender will allow what the op is suggesting.

The mortgage deed is usually supplied by the bank in the loan pack

touchdown77

Wow people get up early on this thread ! 12 posts since midnight last night and is only just gone 10am !

Thanks everyone for the insights -- as someone mentioned the intention of this man is to avoid probate issues on the family home however he is adamant that he won't go through the mortgage process to add his wife - so he plans to write to the bank to seek consent and if they refuse then he'll do nothing until the mortgage is fully repaid in about 5-8 years time.

phormium

While he's writing to the bank ask what is the procedure to add her to the account, I seriously doubt it's a full mortgage application and nothing but her details will be needed and a few forms. He shouldn't have to provide income details etc, why would he, sure he already has the money!