Is it possible to have two names on the mortgage but only one on the deeds?

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michaelm

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If, for example, two siblings wanted to take out a joint mortgage on a house but only one of them would have their name on the deeds . . would the banks be amenable to this or would it likely be rejected out of hand?
 
If there's a sensible reason why one sibling doesn't want to be on the deeds, then it can be accomodated.
 
LDFerguson said:
If there's a sensible reason why one sibling doesn't want to be on the deeds, then it can be accomodated.
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Now that I've typed out the question I guess it wouldn't work out. I'm thinking of a situation where each sibling will pay half the mortgage but only one (who wouldn't secure the full mortgage on their own) will own and live in the house. I guess there could be buy-to-let and gift tax complications.
 
Part of me takes the view "If Sibling A doesn't qualify for the mortgage, then perhaps s/he should wait until s/he does qualify - rent and save up etc." But perhaps I'm missing important elements of the tale.

In the circumstances you describe, I'm struggling to see what the benefit to Sibling B would be, unless s/he's willing to pay an awful lot of cash for the eternal gratitude of Sibling A.
 
Why would you want to pay half the mortgage on a house that you don't own & won't live in?
 
It's both hypothetical and harebrained. There can be a large disparity between when one can afford and what the banks will lend. In this case sibling A would be repaying the full mortgage, sibling B would in effect be a super-guarantor.
 
One could debate the point that the current lending criteria are actually the sort of prudent practices that should have existed all along - requirement to save up deposit etc. So perhaps if Sibling A can't qualify for a mortgage s/he should just accept that? S/he might be able to afford a bigger mortgage right now, but what happens if interest rates rise, taxes rise etc.?

On the other hand, I'm aware that sometimes logic doesn't prevail in lending right now, as I've seen some applications declined that I myself would have approved (if I had The Power) despite my admittedly fairly cautious approach.
 
LDFerguson said:
One could debate the point that the current lending criteria are actually the sort of prudent practices that should have existed all along -
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Well I'd agree with that. In this case sibling A would be providing a 1/3 cash deposit and the whole mortgage wouldn't be a great deal more than A is currently paying in rent.

Although I personally don't think that it's a good idea to go guarantor I'm wondering how the banks view such these days and if the notion of a super-guarantor would be entertained, as I don't think there is a huge risk for the bank in such an arrangement.
 
If Sibling B is willing to join Sibling A on the mortgage application AND has sufficient unencumbered income to be of use, then it can be done.

But Sibling B needs to be aware of what s/he's signing up for. S/he might not be named on the deeds of the house but s/he is fully liable for the mortgage repayments if Sibling A stops paying.

Even if it never comes to that and Sibling A carries on paying for their mortgage themselves, if Sibling B wants to get their own mortgage or loan, it will be viewed that they currently have a debt and their own loan viability would be significantly reduced by being jointly on the mortgage. Doesn't matter if they can prove that Sibling A is actually making the repayments - they're named on the mortgage so it's also their debt.

So really this would only be an option if Sibling B has very big income of their own and/or no desire to borrow money from a bank in the future.
 
If Sibling A loses their job, becomes incapacitated, decides to be a bit of a git then Sibling B would be on the hook for the whole amount. Run.
 
I may be stating the obvious, but it would also be very important for the siblings to sign a legal agreement that stipulates what happens if

One of them dies
One of them gets married
One of them has a child
One of them wants to sell and the other one doesn't
One of them can't / won't pay

A mortgage is a long term commitment and things happen in life that people don't for see.
 
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