Sole ownership for a couple?

[buuuka]

Hi All,

We want to buy a house with my partner (we've actually made an offer already) but I'm studying at the moment and we won't get enough mortgage if we both apply for it (£75,000 if only my boyfriend applies and £55,000 if both of us do). We could wait a few months (the course ends in June), I could find a job, and then we could both apply for a mortgage. However, I want to start a postgraduate course in October and I would like to apply for a loan, so we thought that it might be a better solution for my boyfriend to apply on his own. We could keep my credit history clean then in case we need another loan in the future.

But here comes the ownership issue. I am going to put 5% of the deposit (my partner - 10%) and we're going to split the cost of the mortgage between us. We would like to be equal legal owners of the house but, obviously, it's impossible to do it if both of our names don't appear on the mortgage.

We've been together for 8 years now and we trust each other, but if we make him a sole owner of the house, what happens if we split up? What happens if he dies? We were adviced to sign a declaration of trust but will this be enough? For example, what if I we split up and I decide to sell my share? Will I be able to do this, if my partner is a legal owner of the house?

Is this a good solution? Or is there a bettrer one? Or maybe we should both take the mortgage?

Please, give me some advice. Thank you!

[Richard Webster]

There are thousands of couples where one is not working who get mortgages together so unless the not working one has an adverse credit history this shouldn't be a problem. You may then want a deed of trust to set out your respective shares in the property.

[buuuka]

That's what I was told by the lender before we applied for the mortgage. But when it came to the application process, they told me that we would get more money if my boyfriend applied, without me. And when I check it using the "how much can you get?" calculators available on some lenders' websites, it seems that they are right. We will get less money if we both apply.

[Richard Webster]

If boyfriend is sole owner and sole borrower then you can have a deed of trust and you can even have a restriction placed at the Land Registry preventing a sale without your consent.

However your share can't be sold separately very easily. Who is going to want to share the house with your boyfriend? Would the boyfriend agree to you transferring your share to some third party?

The share only has a value if the property is sold and boyfriend may not want to do that. The deed of trust may say that if you require your share out he has to sell the property but if he won't sign you would still have the hassle and cost of taking him to court.

So the extent of your commitment to each other is important. Buying a house or flat is a big commitment and you get linked together financially and this can remain even after a relationship has broken down. A deed of trust is a help, but it doesn't provide a universal panacea. See People Buying Houses and Flats Together and Joint Occupation or Ownership of Flats and Houses - Problems that can arise

[Select Estate Agents]

This is the 5th response I have seen from Richard Webster.. Must say im very impressed with the knowledge and advice!