Can mum help me with house deposit and be on a joint mortgage with me?
Q: I have insufficient capital for a deposit and don’t earn enough to get a mortgage to buy a house on my own. Could my mother help with the deposit and hold a joint mortgage with me, even though it would only be me living there as she has her own home?
A: You could apply for a Joint Borrower Sole Proprietor mortgage. This would mean that you and your mother would share responsibility for the mortgage but you would be the sole legal owner of the property.
Alternatively, you could apply for a joint mortgage with your mother, in which case you and she would also be joint owners of the property, regardless of whether it was only you living there. Either way, you should be aware that due to your mother already owning a property there would be an additional 3% Stamp Duty Land Tax to pay on everything above the first £40,000 of the purchase price, and you would not qualify for first time buyer status and any associated benefits.
Another consideration is what would happen if your mother (or you) should die. In this respect you would need to decide whether to purchase the property as joint tenants or as tenants in common.
In the case of Joint Tenants property shares are equally split and one owner cannot sell the property without the consent of the other. When one owner dies their share automatically transfers to the other. Tenants in Common can each hold a different proportion of shares in the property, and the deceased owner’s share goes in accordance with their Will (if they have made one). A Deed of Trust could also be drafted setting out how much each party has contributed and how it should be split if the property was sold.
There are many considerations along the route you are exploring, some with potentially adverse implications. You should really seek more in-depth legal advice before going any further.
• This question has been answered by Clare Lewis, a licensed conveyancer with GHP Legal. If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194.
