Joint Application where one person has been named on another mortgage

ghg

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Hi there,

We are a couple looking to apply for a mortgage we have been saving regularly towards a deposit etc .

A few years ago my girlfriend, in an attempt to assist her brother and wife to get a mortgage, put her name down on a joint mortgage with them. To date she has not paid anything on this mortgage and I believe that the health of that mortgage is OK (no missed payments etc) although I would guess that the property is in negative equity.

We recently applied for an ICB credit report for my girlfriend and this report makes no reference to this mortgage.

In an attempt to get some clarity we have asked the couple for all documents related to the mortgage. I had a quick look over it, to be honest I don't really know what I am looking at, but one thing I noticed was that I could find only find one form where my girlfriend's name was written and this was in pen below their two names in print but nothing else. I could not find any signature, however, I cant guarantee we have all the documents related to the mortgage.

So I am wondering where we stand as regards this? Is the fact that her ICB report is clear mean that we are OK to apply for a mortgage? Or could this come back to bite us if we do get a mortgage? Does anyone have any advise for what we could do? I know this is quite a specific problem so maybe we should speak to a financial advisor. Would anyone have a recommendation for a good advisor in the Dublin area ? I know there are tons but just looking for some personal recommendations.

Thanks in advance.
 
Is her name on the mortgage or isn't it? What about the mortgage statements, does her name appear on those?

Do you mean you are considering not mentioning the existing mortgage to the bank as it does not appear on the ICB?
 
Hi

Thank you for your reply.

I have checked and her name is on the mortgage.

I have not been through the mortgage application process before so I am not aware of what is required to mention and given that the mortgage was not on the ICB report I was wondering if this meant it would not affect our own application. I take it from want you are saying that we are obliged to mention this, is this the case? Does that mean that she would be effectively discounted from our own application?
 
A few years ago my girlfriend, in an attempt to assist her brother and wife to get a mortgage, put her name down on a joint mortgage with them.

OK, so your girlfriend is on the mortgage with two others. The mortgage is performing.

The simplest thing to do is to approach the original lender and ask them if your girlfriend can take her name off the mortgage. If the couple have been paying the mortgage and have the income to support the mortgage, the lender may allow that.

There could be a problem if it's a tracker mortgage, as the lender might use it as an opportunity to get them off the tracker.

This might take some time, so apply for a new mortgage anyway. You should disclose your girlfriend's situation in full to the lender. It might be worth considering applying for a mortgage to the bank with whom she has a mortgage already, if they are still lending.
 
Hi Brendan,

Thanks for your message.

I believe the original mortgage is a tracker alright so it might be difficult to remove my girlfriend's name from it but we will look into this.

When you say "..so apply for a mortgage anyway", would my girlfriend's potential obligation to this other mortgage be taken into account in full so effectively the amount we would be able to borrow would be greatly reduced? Or is there some flexibility if you can show that the mortgage is performing with no payments made by my girlfriend.

One other question, if we are unable to get her name off the other mortgage and something goes wrong with that mortgage further down the line would there be a potential to loose our own home or would this be considered separate as my name would be on it and is not on the other?

Thanks again
 
When you say "..so apply for a mortgage anyway", would my girlfriend's potential obligation to this other mortgage be taken into account in full so effectively the amount we would be able to borrow would be greatly reduced? Or is there some flexibility if you can show that the mortgage is performing with no payments made by my girlfriend.

I would imagine it would affect the amount you could borrow. But the only way to find out is to apply for a mortgage and see.

One other question, if we are unable to get her name off the other mortgage and something goes wrong with that mortgage further down the line would there be a potential to loose our own home or would this be considered separate as my name would be on it and is not on the other?

She will own half your jointly owned house. In theory, they could call on her to sell your house and her half would be used to pay off her debts. If there is a material risk that this could happen, then you might be better off not buying jointly.

Brendan
 
The best solution for everybody is for your girlfriends to be removed from the current mortgage. Even if this means her relations lose their tracker. Hopefully this won't happen. She helped them in the past and now it's time they repay that by getting her off the mortgage documentation. But if losing their tracker means they cannot repay a variable mortgage then it wouldn't make sense.

This mortgage is going to affect her ability to borrow and potentially has big implications for her and you both if the couple lose their jobs and cannot repay their mortgage etc.
 
Hi,

Thank you Bronte and Brendan for your replies and information.

It does seem obvious now that the best solution for us would be if we could get my girlfriend's name off their mortgage. We will try and pursue this further and I'll let you know how it goes.

Thanks again
 
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