getting a joint mortgage: me, DP... & my dad.

[iskra]

DP & I have been looking at getting a guarantor mortgage, guaranteed by my dad. Our broker has suggested that we would get a better deal if we got a joint mortgage with my dad. Dad is happy to do this, but I'm just wondering what any possible repercussions could be - capital gains tax, bankruptcy, redundancy...? What else should we consider?

If you become "tenants in common" rather than "joint tenants" you can avoid the problem my DH and a relative had. They bought a house as joint tenants. When the house was sold the relative was entitled to half the profit, not 1/5, which was a quite a few £££ different. If they had been tenants in common the relative's share could have been resticted to 1/5. This caused a bit of a falling out, even though the relationship had been good before. a more reasonable person would have refused to take more than his share instead of cleaning up

You might not think that since it's your Dad you won't fall out; DH never dreamt that this was possible in his family. DH skimped on getting a separate solicitor, not realising that his and the relative's interests were different and "anyway families don't need to be formal". A painful lesson.

CGT: if you and your partner live there as your main home then it should be exempt from CGT. Presumably your Dad wouldn't live there, in which case he might be liable for CGT on his share of the profit or CGT loss relief on his share of the loss. There is an annual exemption allowance for CGT so it would depend on how much profit was made.

There are also inheritance tax advantages if you are tenants in common - but maybe this is a long way off yet!

Thanks for that Margles. I think we will definitely get solicitors to look at it all for us.