Active discussions

Meet the Other Phone. Only the apps you allow.

Meet the Other Phone.
Only the apps you allow.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Mortgaging our owned home

131 replies

Missmummy88 · 24/02/2022 12:16

Any downsides I should be aware of putting a mortgage on our owned home? Current value about £550000 - fully owned by me ( gift from parents) with a long term partner 13 years & 3 kids and very happy. We want to get a small mortgage to add a 4th bedroom and new kitchen & redesign downstairs. This will allow each child to have their own room & make the house more liveable ( currently layout is awkward with kitchen & living area opposite ends of house having to walk betweeen 3 rooms. We want to do this now rather than when kids are older (hence mortgage rather than Saving) we both have jobs and currently save my wage & spend dh (although I work part time so circa 13,000 a year saved)

Is there anything I should be aware of? Any precautions I should take?

OP posts:
Original poster
Missmummy88 · 24/02/2022 12:17

Forgot to add mortgage will be around £300 per month

OP posts:
Newjobformoremoney · 24/02/2022 12:20

Mortgages are very good rates. I would go for it as long as you can afford the additional costs (mortgage And running costs).

TheHoptimist · 24/02/2022 12:59

Lots of 'we' in there
You say partner but then DH and it was your money
Are you married?

You will be getting a mortgage as you own it?

BarbaraofSeville · 24/02/2022 13:16

If the house is solely in your name, you might have to take the mortgage out on your own (check this, I'm not sure) then the major issue could be affordability, because your salary is low and they may not take into account that your outgoings on paper are nothing/very little.

You say you usually save your money. As you are spending the money on home improvements, so it's going into your asset, do you have money saved that could cover/go towards the work?

Aprilx · 24/02/2022 13:23

I can see where you are coming from but you refer to it as “our” owned home but then also say it is fully yours. You refer to a partner but then say DH (H is for husband). So the situation is not clear but these are important facts and important things to consider if your plan is to go ahead.

frgh · 24/02/2022 13:27

How long ago was it gifted?

frgh · 24/02/2022 13:28

How did they avoid CGT?

thelonggame · 24/02/2022 13:33

if it's a small mortgage you are confident you can afford I'd say go for it.
We cashed in savings years ago to build a kitchen extension and made the old kitchen into a study, best thing we did, it made me happy everyday.
Unfortunatly divorced now and he has the house, but no regrets on spending the money whie the kids were still small.

Original poster
Missmummy88 · 24/02/2022 13:34

We are not married and it was gifted a long time ago. So yes the house is in my name only. So this would be an issue? We couldn’t get a joint mortgage for the additional?

OP posts:
LadyMacbethWasMisunderstood · 24/02/2022 13:38

Lots of issues regarding this. You need to see a solicitor to protect your major asset. He cannot get a mortgage on a property he has no interest in as there is nothing to attach the charge to.

Dishwashersaurous · 24/02/2022 13:41

The mortgage can only be in your name. Because he has no assets. You are unlikely to be able to borrow £55k on an income of £13k.

Therefore the only way for a joint mortgage is to make him own part of the house.

Therefore the only options are save up or an unsecured loan which would be more expensive than a mortgage but could be joint

MrsDeadpool · 24/02/2022 13:42

@Missmummy88

We are not married and it was gifted a long time ago. So yes the house is in my name only. So this would be an issue? We couldn’t get a joint mortgage for the additional?
Yes, of course they could only accept you as the applicant - your partner cannot raise a mortgage against an asset he doesn’t own. The idea is that if you default on the repayments, the lender can repossess the house. If he doesn’t own it, the lenders would not be able to take the value from his share, because he doesn’t have one.
Dishwashersaurous · 24/02/2022 13:45

Sorry just seen that you didn't say the amount you want to borrow. But on £13k income it is unlikely to be very much

TeeBee · 24/02/2022 13:47

I'd be inclined to get as much mortgage as you can on your wage and then borrow the rest through a secured home improvement loan. That way, the house remains yours. Not worth risking your asset.

Dishwashersaurous · 24/02/2022 13:47

The extra costs of a personal loan will be partly offset by the fact you have no housing costs

Marmite27 · 24/02/2022 13:48

Mortgages are possible on un encumbered properties, but as you’re the sole owner it would be in your name only.

The only way to take out a joint loan is to put him on the deeds.

Marmite27 · 24/02/2022 13:49

Sorry that should read joint mortgage not loan.

What about an unsecured joint loan? Could you borrow enough to make the improvements that way?

frgh · 24/02/2022 13:49

keep it your name.

HereComesTheSum · 24/02/2022 13:52

@TeeBee

I'd be inclined to get as much mortgage as you can on your wage and then borrow the rest through a secured home improvement loan. That way, the house remains yours. Not worth risking your asset.
Jesus what terrible advice. OP see a solicitor on your own and a reputable mortgage broker together once the legalities and protecting your asset are resolved.
HettySunshine · 24/02/2022 13:52

You would need to to do a transfer of the property into joint names in order to obtain a joint mortgage.

You could do this as tenants in common in unequal shares so you do would only 'own' a share equivalent to half the sum of the mortgage ( so if you are borrowing £50,000 he would effectively own £25,000 worth of the property and the rest of the property remains in your ownership).

You would need to speak to a lawyer about you both signing a Declaration of Trust which would protect your share in case the relationship breaks down in the future.

TeeBee · 24/02/2022 13:53

@frgh

keep it your name.
I agree!
HettySunshine · 24/02/2022 13:54

Sorry, HE would only own a half share of the amount of the mortgage.

spaceman1 · 24/02/2022 13:56

Before going ahead just remember how lucky you are to not have a mortgage, if I was in your position I would save the money up and then do the work. Being mortgage free gives you so much freedom, do you want to give that up?

Blossomtoes · 24/02/2022 13:59

@spaceman1

Before going ahead just remember how lucky you are to not have a mortgage, if I was in your position I would save the money up and then do the work. Being mortgage free gives you so much freedom, do you want to give that up?
This. Over and over again.
hellithurt · 24/02/2022 14:00

@frgh

How did they avoid CGT?
why would they pay CGT?