Can you have a jointly-owned property with only one name on the mortgage?

[Thirdpartyworrier]

DH has bought a flat on a buy-to-let mortgage for DSD to live in. The mortgage is in his name alone, but he says the flat is 'jointly owned'.

DH is insistent that if he died, the mortgage company would sell the flat to pay off the mortgage, but surely a jointly-owned flat (ie joint tenancy) would automatically become DSD's sole property, leaving DH's estate (DC and me!) to pay the entire mortgage?

Would any company have agreed to a mortgage on this basis? We own our house jointly, but as tenants in common, and both our names had to be on the mortgage, wouldn't this have to be the case for a joint tenancy too?

(Should point out I've absolutely no problem with DH providing flat for DSD, I just don't want her owning a property to mean DC and I risking losing ours!)

[Gonzo33]

Unless you buy cash your name has to be on the mortgage to be on the deeds. Your DH should really think about getting Life Assurance to cover the mortgage should he die that way it will not affect your jointly owned property.

[Thirdpartyworrier]

Thanks Gonzo. Flat definitely mortgaged rather than cash purchase. So in order for DSD to own half, she'd have to be jointly liable for the mortgage?

In which case, if he died, she'd be solely liable for any outstanding payments?

That would be a relief from my point of view, but a nightmare for her. Certainly don't want her to be homeless either.

I agree absolutely about life assurance but DH considers it a waste of money! He's conceded that it's necessary for our house because of young DC, but I think he hopes that at some point DSD will be able to afford to take on the mortgage herself. I, on the other hand, can't see her ever earning enough to qualify.

[eaglewings]

We bought house with Dad, my name on mortgage only so his name is not on the deeds :(

To make sure the % he put in was still safely his we drew up a contract saying that should I die first he still owns the majority of the property. If he dies first I have to pay that amount to his heirs

Costs less than in insurance policy you may never need

[nineyearoldsarerude]

Both our names are on the house but only my husband's name is on the mortgage.

[Thirdpartyworrier]

Nineyearoldsarerude, can I ask whether you own the house as joint tenants or tenants in common? Does the mortgage cover more than half the value of the property?

[nineyearoldsarerude]

Hi, we took out the mortgage eight years ago and the mortgage originally would have been more than half the value of the property but is now about £60k and the house is worth about £200k. We are joint tenants.

[Gonzo33]

The law has changed since then though.

eaglewings, your Dad could have got the solicitor to place a charge over the property (completing a deed of postponement as mortgage company would want first charge).

[Thirdpartyworrier]

That's very interesting, nineyearoldsarerude. I've been doing a bit more reading around and the general consensus seemed to indicate that anyone named as a registered title holder has to be included on the mortgage, unless the property is owned as tenants in common in equal shares and the mortgage is for less than half its value.

The explanation given was along the lines that, with a house in joint tenancy, when the first tenant dies the second automatically inherits the whole of the ownership of the house so, if the person who died was the only one holding the mortgage, how would the mortgage company recoup the loan?

Clearly this didn't apply in your case. I wonder why? I think I need to do more reading!

[Thirdpartyworrier]

Ah! Cross-posted with Gonzo. That would explain it then!

[Gonzo33]

That is why mortgage lenders used to insist on being noted as an interested party in any Life Cover (which used to be insisted upon) and they also used to ask for a copy of the policy document.

Some lenders still insist on this.

[nineyearoldsarerude]

Interesting that the law has changed. We didn't do it for any particular reason-they just asked whose names should go on the mortgage and I was happy not to have mine on it! We did both get life insurance for it though.

[narmada]

I didn't think lenders were allowed to insist on life cover any more before a mortgage could be taken out. I thought this was now against the law?

[mumofsoontobelawstudent]

DH and I own a property jointly and the mortgage is in his sole name. Is this unusual then? Bought last year

[notcitrus]

They made a mistake when we bought our first flat - no-one queried it being in both our names but only MrNC's name on the mortgage, but they freaked out when we went to sell it and accused us of fraud and all sorts before realising it was their cockup and obviously having us sell it would solve the whole problem!