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Thomas
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7478
Experience:  BA (Hons), PgDip, Practising Solicitor
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We want to help a younger family raise sufficient deposit to

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We want to help a younger family member raise sufficient deposit to buy a property. The best way seemed to be joint equity -- tenants in common based on percentages owned -- we would put in cash and they would get a mortgage for the remainder. We are advised however that lenders would insist that all names on the title deed would also have to be on the mortgage. But lenders will not accept anyone on a mortgage which would extend beyond their 75th birthday, which makes the mortgage period too short and the monthly payments too high. Is there an accepted legal way of providing lenders with a potential charge on the whole property (including our piece) in the event of default, but without us being part of the mortgage itself ?
Hi

Is it necessary that you are named as registered propreitors? Or is it sufficient merely to secure your interest in the property after the mortgage?

Tom
Customer: replied 5 years ago.
Hi Tom

I'm not quite sure what registered proprietor means. But we would waive any rights to occupy or have unrestricted access to the property, and would just receive a rent in respect of our share from the relative who will be living there. As you infer, the purpose of the tenants in common agreement would be to secure our interest in the property.


Hi

Registered proprietor means the registered owner of the property at the land registry.

You could arrange for the family to be the registered proprietors alone with you either taking a second legal charge (similar to, but after the mortgage which is a first legal charge) or executing a declaration of trust.

A charge would be registered against the title of the property and theorem the property could not be sold with the monies specified in it being repaid. It would state the amount you are to be repaid upon sale.

A declaration of trust is a deed declaring you percentage interest in the proceeds of sale.

Both could specify you have the right to recaive rents from the property.

In both cases you would not be the owner but would secure your interest in the property. There is no getting around the lenders requirements in terms of ownership and being named on the mortgage

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Tom.
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