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Please Help-Problems with Joint Purchase

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  • Please Help-Problems with Joint Purchase

    Hi there, thanks for taking the time to read this!

    Right, I will try and make this as short and simple as possible. Me and my girlfriend have decided to buy a house together, I am in full time employment and she is a student for one more month, she will then be getting a job, hopefully within a month or two of finishing her degree. We have found a house which we both love and put an offer in on it, eventually accepted which was now four weeks ago so the vendor is getting a bit anxious.

    Then the problems start, no one would give us a mortgage, the house value/offer is £158,000 and both of us can contribute 5% each as a deposit leaving £142,200 as a mortgage loan required. Because my girlfriend has no salary, no-one would lend us the money; after all it is more than 5 times my salary. It was looking a bit doom and gloom and we really didn't wanna lose the house, but good news..... HSBC said they would lend the £142,200 we needed no problem and at a fantastic rate of 5.88% fixed for 2 years.

    However, they declined it on a joint application - stating that my salary would not support the mortgage, bills and my girlfriend. I tried to explain to them that she would have a job very soon and I would not be supporting her but they wouldn't have it. They then advised that if we put it through in just my name then it might be accepted, low and behold it was. I have paid the £499 booking fee, which means the rate expires in 3 weeks and it is non-refundable after that.

    The problem is that my girlfriend is concerned that she is putting half the deposit down, £7900 and will be paying half the monthly mortgage repayments but on the mortgage it will only be in my name. I can understand her worries because I would not want to pay that money and have nothing to show for it. What happens if we split up or if I die, what will happen to the house, will she be entitled to have it, or her half of the money?

    HSBC have already said that they may be able to add her to the mortgage once she has a job but there is no guarantee of this, it will depend on alot of things. A solicitor has explained she cannot be on the deeds with me as 50/50 ownership if she is not on the mortgage. We really don't wanna lose the house, ie wait until she gets a job and 3 months of wage slips etc so that is not an option! So my questions are this
    • How can I ensure that my girlfriend will be entitled to half of the house even though her name is not on the mortgage should something bad happen
    • Show that she has paid half the 10% deposit and will be paying monthly repayments
    • What is this called
    • How much will it cost etc etc
    Your comments and views would be highly appreciated.

    Thanks in anticipation

    Alex Wood

  • #2
    To be honest, I think you have rushed into this, and personally think you should step back a bit.

    Sure, the house is lovely, but you're buying in a market where house prices are falling - so buying now invites all the dangers of having negative equity (ie, your property is worth substantially less than the mortgage paying it).

    Mortgage lending is more restrictive at present, but she really should be a job first - if it's really that easy, it won't be a problem - if it proves harder (and we are entering a recession) then it means you would face serious costs and potential problems paying the mortgage.

    So step back, get your finances properly in shape - and that includes employment - and then look at your options again. Consider the implications of a falling property market, and don't just pay for any mortgage application that doesn't have her name on it!

    While you may not like the idea of wasting £500, you could find the losses could have been bigger if you'd moved forwards with this...

    Simply my personal opinion.

    Comment


    • #3
      Having been in a similar situation, please do not rush into this. You will both regret it if there is a crash. Hang fire - there are such a lot of properties on the market, surely you can wait a while - you will find your home eventually. A month is not long before your girlfriend can look for work, and she will need permanent employment. Don't break your hearts over a house!
      Pinoso Property Property Murcia

      Comment


      • #4
        Hi all

        Firstly, I have to say I agree with the above comments.

        But I believe it can be done if you wish to do it.

        I think it involves a solicitor drawing up a deed of trust between the two of you. Can't comment on the details or costs as I don't know much about this at all. But I have heard somewhere of someone doing something similar. A good solicitor should be able to advise.

        Scott

        Comment


        • #5
          Hello all,

          Alex, I feel you need to be brutally honest with yourself on this one. One of the first questions to ask yourself will be is the property worth the £158,000?

          If you have been able to research similar houses in the area and what they have sold for over the last two years, you will have a good idea of if you have a good deal or not - There are bargains to be had in this current market, but research into the price you are paying is essential. There is a chance you may be able to secure a similar property at a cheaper price. It is a buyers market, so use that to your advantage.

          If you do decide to go for it, Then the previous reply by Scott should be heeded. A local solicitor will be able to give you good advice regarding the deed of trust. Please ensure you and your partner see the solicitor together so you are both happy with what it entails and what it means in the future for both of you.

          Good luck with everything.

          Mark

          Comment


          • #6
            Originally posted by Woody View Post
            Hi there, thanks for taking the time to read this!

            Right, I will try and make this as short and simple as possible. Me and my girlfriend have decided to buy a house together, I am in full time employment and she is a student for one more month, she will then be getting a job, hopefully within a month or two of finishing her degree. We have found a house which we both love and put an offer in on it, eventually accepted which was now four weeks ago so the vendor is getting a bit anxious.

            Then the problems start, no one would give us a mortgage, the house value/offer is £158,000 and both of us can contribute 5% each as a deposit leaving £142,200 as a mortgage loan required. Because my girlfriend has no salary, no-one would lend us the money; after all it is more than 5 times my salary. It was looking a bit doom and gloom and we really didn't wanna lose the house, but good news..... HSBC said they would lend the £142,200 we needed no problem and at a fantastic rate of 5.88% fixed for 2 years.

            However, they declined it on a joint application - stating that my salary would not support the mortgage, bills and my girlfriend. I tried to explain to them that she would have a job very soon and I would not be supporting her but they wouldn't have it. They then advised that if we put it through in just my name then it might be accepted, low and behold it was. I have paid the £499 booking fee, which means the rate expires in 3 weeks and it is non-refundable after that.

            The problem is that my girlfriend is concerned that she is putting half the deposit down, £7900 and will be paying half the monthly mortgage repayments but on the mortgage it will only be in my name. I can understand her worries because I would not want to pay that money and have nothing to show for it. What happens if we split up or if I die, what will happen to the house, will she be entitled to have it, or her half of the money?

            HSBC have already said that they may be able to add her to the mortgage once she has a job but there is no guarantee of this, it will depend on alot of things. A solicitor has explained she cannot be on the deeds with me as 50/50 ownership if she is not on the mortgage. We really don't wanna lose the house, ie wait until she gets a job and 3 months of wage slips etc so that is not an option! So my questions are this
            • How can I ensure that my girlfriend will be entitled to half of the house even though her name is not on the mortgage should something bad happen
            • Show that she has paid half the 10% deposit and will be paying monthly repayments
            • What is this called
            • How much will it cost etc etc

            Your comments and views would be highly appreciated.

            Thanks in anticipation

            Alex Wood

            Interesting. I hope everything works out

            Comment

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