AIBU to advise my daughter that she'd be daft to not put her name on house deeds?

[User197634]

My DD (20) is planning on buying a house with her bf of 2 years. He has been given a lump sum buy his parents to put down on a house, and my DD mentioned that it would only be his name on the deeds, even though she'll be sharing the bills.

I've advised her that, yes by all means her bf should have a contract drawn up to protect the money he's putting in should they split, but I still believe she should insist that her name goes on the deeds too.

I think she thinks that I'm over thinking things, but I want her protected too. Any advice appreciated

She needs to elope with him first🤷‍♀️

She needs independent legal advice

If she is unmarried and planning joint mortage but not in the deeds. She will be liable for the debt but have no claim on the property

That is not the case at all. I am
on a mortgage but am not on the deeds. I have no ownership of the property at all. It depends on the type of mortgage.

I don’t think we have this in Australia, it’s not the definition of mortgage. There are personal loans, credit cards, lines of credit, company loans etc and there are mortgages, which have an asset pledged as collateral- the bank can charge low (relatively to personal loan or car finance) rates because it’s low risk- there is a house there that they have the right to seize and cover the loan if you can’t pay. Naturally they charge more interest for higher loan to value ratios where the risk the asset value not cover the loan increases. How does yours work without a property pledged against it? I am not sure how a normal mortgage works without being on the deeds as the bank can’t go after the property if you don’t own it?

I did exactly this. Tenants in common agreement to protect my deposit (so if we split I’d get that back first out of the proceeds, then we’d split the remainder and any equity would be evenly split. we were 50:50 on everything so that made it simpler. If there is a big disparity in incomes, they will need to do some careful maths to work through a fair distribution.

if neither can afford the property on a solo basis they will need to sell or buy each other out. A good solicitor will broach this as part of the TinC agreement and how a buy out process would be agreed.

Lastly, the agreement is valid until
they marry. If she has kids before marriage and in particular stops working or goes PT she will have no more rights to a bigger share.

If he keeps her off the deeds then he can get a mortgage by himself and be responsible for that alone. She should have a rental agreement drawn up. People may think that sounds nuts but why should he get all the protection. He can kick her out if she’s not on the deeds and they split up.

No, your daughter should not get involved. It's her boyfriend's money, given by his parents for his use, specifically to buy a house for himself. This could lead to disaster if they end up disliking each other and drifting apart over time. I believe everyone should focus on their own lives until their late 20s, working on becoming financially, emotionally, and mentally stable. There's no need to rush into these things. I can already imagine your daughter posting on Mumsnet, upset and crying, with commenters harshly criticizing the guy as if he's entirely to blame, even though the responsibility lies with her too.

She won’t be paying for half, because the 60k would make up a % of the total. Also presumably the boyfriend will also be paying mortgage too.

if it were my son, I’d be advising him to make sure she is NOT on the deeds until they are married or a long term commitment where she for example drops her monetary contribution to look after kids etc.

is the mortgage going to be in both their names?

It’s a mortgage called Joint Borrower Sole Proprietor( or the other way round). They’re quite common in certain scenarios. I’m jointly liable for the mortgage but I don’t own the property. In effect, I don’t pay the mortgage at all, but if the owner fails to pay, I’m liable. I had to prove savings and salary and take legal advice.

If she's applying for a mortgage with him then she definitely should go on the deeds. She'll be part owner and he can protect his deposit.

"I am not sure how a normal mortgage works without being on the deeds as the bank can’t go after the property if you don’t own it?"

This is what is doing my head in reading some answers on the thread.

Joint property means getting a contract mortgage where 2 or more owners have equal rights to the property and share the responsibility of paying the bank loan. NO bank will give a loan in joint tenancy or tenants in common without the people signing the loan being on the deed. The bank wants to make sure the loan covers ALL property owners to go after them if they keep defaulting loan repayments.

This is difficult. How is she paying towards the cost of living in the house? If she is not buying the house and he is, then she should be paying rent.

If she wants to share buying the house, and he is happy for her to do so, then they need a legal agreement drawn up to show what each of them have put in and she needs to pay towards the mortgage, and any money she has put in, and any mortgage payments she has made, she can get back if they split up, plus a percentage of the house valuation (valued by the median of three surveys). In this case she should be on the deeds.

The bills are nothing to do with the house ownership. She should pay half (unless the house is huge and has several bedrooms, then she should pay less). This should not count towards mortgage payments, its just bills - the cost of heating and lighting etc.

Are you having a funny 5 minutes, so she isnt on the deeds, which is what I said.

Not necessarily. It’s the “norm” and as I said, it costs money to change it, but it’s possible to have your name on the loan but have no rights to the property. And that’s a dangerous position to put yourself in.

Dd2 and her dh recently bought their first house together. The monies for the house came from dh's dgm. I don't know if dd's name is on the deeds, they don't have a mortgage. The house including renovations came to about £2m. Dd2 is the bigger earner.

They are married though so a totally different scenario.

F

100% agree!! She needs to protect herself!! definitely have it drawn up that they are on the deeds but the deposit he put in he gets back!

e.g the first £50k is his then the rest is split (dependent on deposit amount)

OP, unless she's on the deeds she should absolutely NOT be on the mortgage.

If he's buying it in his name only, she needs to say she will pay rent/bills to him so she can walk away at any time without being tied into a huge debt and without any responsibility for maintenance and upkeep of the property.

If they buy together and she is contributing financially to the mortgage, she must be on the deeds. He can have a bigger deposit protected with a trust agreement done cheaply through a solicitor, but she needs to own shares in the house or what is she paying for.

Then there's the legal fees and stamp duty and potential mortgage fees - is she expected to pay half of those too without being on the deeds? If so, major red flags and alarm bells here.

The house is still pledged as collateral against the loan by the BF

So its the same basic process as if they both were on the deed.

The house is at market value eg 500,000
The loan is MV-60k
(Assuming the bank dont lend on other costs)

BF owes bank 440,000
DD owes bank 440,000

Each debt is only reduced by the total repayment (+interest)

And the bank can collect the full amount from one or both.

If BF is not paying bank write to him asking to make payment

Plus as BF is not paying the bank write to DD looking for the full monthly amount.

Bank warn both that breach of contract will result in the full amount falling due and that they will repossess the house

Bank add on penelties and give them a chance to reorganise if they can prove stoppage is temporary

If BF And DD are still not paying and the bank instruct him to sell the house for the minimum of the loan amount plus any other charges.

And warn her she owes the full amount (with no house to cover or part cover the loan)

Neither paying and house not selling so the bank go to court to get their money.

If DD has 440,000 cash they look for the cash and BF keeps the asset.
If no cash is offered they request an order to seize and sell (and add in the banks costs) to recover their money.
Plus get a court ordered repayment plan against both if the MV will not cover what is owed.

The judge will look at the individual circumstance around ability to pay

So owed 440,000 +30,000 legal etc

House needs to clear 470,000 made 400,000 and BF filed as a bankrupt

DD can be ordered to pay all 70,000 and a charge can be attached to any property she owned and the bank could look for a sale order.

I think this is very risky considering she is only 20 and they have only been together two years. Do they currently rent somewhere together?

Have you met his parents? What are they like?

I get the feeling that they have given him money to buy himself a house and not as a couple. She needs proper legal advice.

She’s not putting up half the money for the house so of course she should not be on the deeds! She will be living there as a lodger (even if she is sleeping with the owner) and so as such she should pay towards bills, as any tenant would!

tenants aren't on the mortgage, and thats what is being suggested

She needs to be on the deeds with bf’s deposit acknowledged so if they split and the house is sold, she gets her share of equity after he takes his £60k. If she doesn’t do this she could lose all her input. If they won’t allow this, she shouldn’t move in.

Paying half the bills or mortgage?

If bills only then she shouldn't have her name on the deeds, if she isn't contributing at all. She should save up as much as she can for her own investments.

On the other hand, no way should she be contributing towards the mortgage of she isn't going to have any equity in the house