FTB Mortgage Advice

[imsofancy]

Hi at nearly 50 I am finally in the position to apply for a mortgage. All very scary, but also exciting to potentially provide some security for my two kids.

I will be applying for a sole mortgage with a deposit ‘gifted’ to me by my husband (he will either borrow from a business or release cash from his pension).

Long story short, husband has a terrible credit history, and has been disqualified as a company director, plus his age is against him so he would NEVER be granted a mortgage, solo or joint.

We have completely separate finances, and I want to know what type of legal advice I need to protect my best interests.

The mortgage broker my husband is talking to is his good friend, so not exactly looking out for my interests.

Husband will live with us in the new property but everything will be in my name only.

Please can anyone point me in the right direction as to exactly what type of independent professional advice I need?

Also can anyone see any pitfalls in this arrangement?

Completely new to the mortgage world and after lots of Googling I can’t work out who I should be talking to next.

Thanks for any help.

Not a lawyer, just have some knowledge of mortgages.

I’m really sorry to have to say this, but no mortgage provider is going to let you buy a property with an adult who is gifting you money and living in the property and not going on the mortgage.

If he’s going to live in the property and not be on the mortgage, you’ll need him to complete an occupier’s waiver to confirm he has no interest in the property and will be the one to leave if you separate. A conveyancing solicitor can sort this for you, it’s pretty routine, you just need to ensure you tell your solicitor and your mortgage lender.

But he won’t be able to contribute to your deposit in this scenario. Sorry, I know this isn’t what you want to hear.

Agree with PP, I’m afraid.

Id suggest speaking to a broker (for free, eg L&C) and explain the situation. I think they’re more likely to be able to find you a mortgage with your husband than without.

I work in mortgages. We would never agree to this especially with his credit history and the deposit being borrowed from a company

Disqualified as a company director and borrowing money for a deposit? Mortgage broker is a mate? Are you serious?

I've had a different experience that PPs here. I had terrible credit and DW bought our first home in her name only. I gifted her £20k towards the deposit, I had to sign a waiver that said I had no interest in the property and that was that. After the mortgage was agreed, we had an independent solicitor draw up a 'deed of trust' that would entitle me to my £20k deposit back + mortgage payments and any equity accrued in the case of break up. We never had any issues securing the mortgage with this arrangement.

It's no different to a parent or sibling or anyone else gifting you the money and living with you?

@BananaHammock23 I suggest you had no problems securing the mortgage as you had the agreement drawn up after the mortgage was approved
The mortgage was offered on the basis that it was a none repayable gift and you had no interest in the property
If you do split you may find you have difficulty getting your money back as you told the bank one thing (and signed a waiver) then signed something saying rhe opposite
Were the bank made aware of this separate agreement and that the deposit wasn't actually a none repayable gift?

Yes you're probably right @Jmaho - just sharing our experience of a way around it. I sought legal advice and feel confident that the deed of trust would grant me sufficient protection if we were to separate. We'd just have to sell the house and split the proceeds accordingly.

OP could explore what we did as an option (with legal advice!). It was the only way we could ever buy a house.

If the deposit was in a savings account in your name when they asked for proof of deposit then doesn’t that remove the issue and he just has to sign the occupier’s waiver?

I know, I know mumsnet is a beacon of morality and will be outraged. But realistically, you’re just buying a family home.

@Rollerskaty Thanks for replying. Honestly I knew it was a long shot, it’s taken years to even be in with a hope of buying a property.

I will find the type of solicitor you suggest and get some proper legal advice before taking things any further.

@OttolenghiSimple Thanks for replying.
Stupid question but what is L&C?

@BananaHammock23 and @Jmaho
Thank you both I do really appreciate you taking the time to comment.

The situation you describe is very similar to the one I am in, with the added complication of our ages.
Sometimes I wonder if it would be best to stay renting but I know this has no long term security.

As I mentioned up thread I will get some legal advice on Monday, I just wasn’t sure which type of solicitor I should contact. But the post has been helpful.

London and Country. They will be able to give you a steer if you explain everything. You may also need to see a solicitor but L&C is free so why not start there? And you’ll get your own information rather than hearing your husband’s mate’s advice second hand.

Can I just point out that solicitors are now extremely cautious with regards to potential money laundering. I’m currently selling a small property as an executor of my mums will. Our buyer had to show proof of deposit funds and mortgage offer to the estate agent before I accepted their offer. 6 months down the line, it turns out that he’s spent the deposit and wants to pay cash from a relative for the deposit. His solicitor has dropped him as a client as he cannot provide proof of where the cash for the deposit has come from.
Also, 5 years ago I gifted my DD cash towards her house purchase. I had to provide 6 month’s worth of bank statements showing this money in my account, as well as signing a letter acknowledging I wouldn’t be living in the property and the money was a gift.
Solicitors and mortgage lenders are super cautious these days!

@OttolenghiSimple Thank you!

@Soontobe60 This is my concern.
Both husband and ‘mate’ say there will be no problems but I’m not convinced.

I have a job and can make mortgage repayments, currently renting in London and prices are sky high. But I don’t have savings (apart from small amounts reserved to help out kids when it comes to uni), so deposit is my main problem.

Husband will never get accepted for a mortgage, but he has access to funds through pension (or loan). I have refused to take a business loan out in my name.

If time was on my side I would save for a deposit and do it all myself but like many people I learned the hard way not to trust all of my husband’s financial decisions.

I'm no legal expert but would a divorce be better before you do this to ensure that your finances are legally separate. Even if you continue to live together and have the same name.
Could he gift you the deposit as a divorce settlement?

@Punxsatawnyphil
Hi I do appreciate all replies, but in the real world divorce isn't an option in all situations. We do, now, have completely separate finances and this has been the case for the past 6 years.

His financial and business issues are not connected to me in anyway.

We have 2 kids who love their dad, between us there isn't enough money to fund to separate households.

There may be lenders who would consider this but unlikely if the deposit is being borrowed from a business. Possible if it coming from pension. I posted earlier but only from the point of view that the lender I work for wouldn't consider it and I know several others that won't also.
He would have to sign the waiver form and the sols would need to be able to evidence where the deposit has come from
You need a good broker as other have suggested.
Are there any other options available to you? Shared ownership scheme?

I know it's not really ideal but whilst you are married, all debts and assets gained during the marriage are seen as joint. You are still financially linked despite having separate accounts.

You wouldn't need to separate or let anyone know that it's been done, it would just be paperwork to guarantee separation of assets.

I can't express enough much gratitude to everyone who has posted.

All of your comments have helped. Next steps are independent professional advice, L&C or other.

I will also take to both H and his 'mate' to clarify my position. I won't do anything to jeopardise my kids future.