Our First mortgage - should we take it out in one or both names?

C

Caroline K

Guest
My fiance has acquired a plot of land and a significant contribution to the cost of building a house from a parent. Planning permission has been granted, we are ready to build and a smallish mortgage of €200,000 is all we will require. This will be our first mortgage, for both of us.

Can anyone kindly advise me about the pros and cons of taking out the mortgage in one or both names. Someone told me that it would make the mortgage more expensive to put it in both our names - is this right???? My fiance can probably comfortably secure the mortgage on his own, although I bring in a significant wage also.

Would love to hear someone's thoughts as I'm very green to the whole mortgage thing, thanks.
 
I would have thought that you'd get a better rate if it is in both names as the risk would be much lower if both of you are working. If your fiance can comfortably secure the amount required, then a combination of both salaries would give a huge comfort zone.

I know its not a nice conversation to have, but you both need to discuss and be clear on who exactly owns the house, what would happen in the event of you both splitting up, who is responsible for the mortgage repayments etc. etc. The question of who's name(s) are on the deeds and consequently who is on the mortgage will follow logically from the outcome of these discussions.
 
I would suggest both names, if only one and the other has a fatal accident then the one remaining will still have to pay the mortgage
 
There are several aspects to this and i would suggest you should have a detailed chat with your solicitor. Incidentally it is likely that any lender will require your fiancee's parents to sign some legal documentation regarding the funding they are providing.
 
Considering the property is to be built on family land I would assume you are both looking on this as a permanent family home - i.e. you would not want to move in the future. If this is the case, I would INSIST on both names going on the mortgage for obvious reasons. As long as you do not intend on buying property individually in the future this is the best option to secure joint ownership of the proposed property.

I assume you are aware that if you both are listed on the mortgage that any first time buyers bonus is lost for any future buys, meaning you cannot avoid stamp duty in the future.

This house is being built by you and your partner on his family's land. Please be sure to secure yourself against anything that could arise in the future. I would also agree with other posters to discuss this long and hard with your partner, however awkward it may be.
 
Caroline K said:
Someone told me that it would make the mortgage more expensive to put it in both our names - is this right????
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The only reason I can think of for a joint mortgage being more expensive is that you will both have to take out life assurance.

You are going to be married, I assume and this is going to be your family home.
If you both live to a ripe old age and and stay married to each other for ever, there is no disadvantage to the house being in your husbands name only.

However, life isn't always like that and I know you don't want to think about what might happen if you split up, but you should protect your own interest by being a co-owner of your home.

Also, the mortgage company will have a lot of say in whether you both need to be on the mortgage. You may not have a choice.
 
dmos87 said:
I assume you are aware that if you both are listed on the mortgage that any first time buyers bonus is lost for any future buys, meaning you cannot avoid stamp duty in the future.
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This is not always the case, Revenue will allow someone to be deemed a first time buyer -
A [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]spouse [/FONT][/FONT]to a marriage the subject of a decree of [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]judicial separation, [/FONT][/FONT]a [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]deed of separation, [/FONT][/FONT]a decree of [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]divorce [/FONT][/FONT]or a decree of [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]nullity [/FONT][/FONT]in the case of the first acquisition of a house by the spouse following the separation or divorce provided that the spouse had, in relation to the former marital home,
  1. not retained an interest in that home;
  2. ​
    whose separated/former spouse occupied that home, which home was occupied by both spouses immediately prior to the decree or deed of separation or dissolution of the marriage.
 
Wow, lots to think about! I knew it made no sense that the mortgage would be more expensive with two (except for life assurance). It makes more sense to be the opposite - God forbid if one cannot contribute to the mortgage for some reason, the bank have a second prson to persue, so it spreads their risk. This will be the home for life, as you say. Will have that chat about the finer details but started it last night and we're both going on the mortgage!

Thanks to everyone who posted - it's great to an indepentent opinion on something like this.
 
joint

Hi, something that hasnt been mentioned and I used to come accross it a lot in my previous employment is that sometimes it is suggested that where one person has received the gift of a site that the house and mortgage should be in sole name until they are married. Reason being that if you both go on mortgage and deeds then you are technically getting a gift of half a site from an unrelated person and depending on value may be liable for gift tax. What a lot of couples used to do was put both on mortgage (cos bank preferred that or income was needed) and just one on deeds - the person who got the site. Now I'm not advocating that as a solution because as I used to explain to couples the whole time this leaves the person on the mortgage who is not on the deeds in a precarious position should anything go wrong. The have responsibility for the debt and own nothing. Obviously all this changes when you get married. I really think you need to talk to a solicitor before you decide which way to proceed.
 
Previous post is correct. You will be liable for gift tax on the the land gifted for the house to be built on.

You can process the mortgage as two on mortgage 1 on title to avoid paying said gift tax.

Best to talk your solicitor in regards to this.
 
Thanks wbbs and Molly - the gift tax issue is exactly the reason I'm not on the title. Hence the connundrum. Once we're married, entitlements to the property will be automatic but it still leave the issue of the mortgage. We've been sidetracked with other issues of late and will be getting back to it again but think we'll have to take some legal advice first, to be sure.

Thanks again!
 
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