co-applicant for a mortgage affect FTB?

L

lettuce_b

Guest
Hi all

I have a dilemma:
Ive been asked by an older relative to be a co-applicant for a mortgage on a property abroad. He is 61 and can only get a 9 year mortgage from this foreign bank due to their country's law. If I come on board with him (Im 26) he can then get a 25 year mortgage, thus reducing his monthly payments substantially. He plans to sell the property on for a profit in 5 years time.

My question is will I lose my FTB status if I become a co-applicant? He maintains I will not be lose it, nor will I be liable for the mortgage in the event of his death as I will not be a co-owner, merely a co-applicant.

Is he right? I dont want to endanger my FTB status. Please advise.

Many thanks.
 
Re: co-applicant for a mortgage effect FTB?

As far as I know, you will lose your FTB status and will be liable for the mortgage as mortgage will be in both your names. Although with mortgage protection if he died the mortgage should be settled.
 
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Re: co-applicant for a mortgage effect FTB?

You will be jointly liable for the mortgage but as you are not on deeds of the property then maybe you will not be an owner so FTB status could be preserved. There are more learned folk than me here to answer this one.

What I would ask is why you are doing this?
Is is just a favour as you seem to be taking on all the risk of being held jointly liable for the mortgage but are not legally entitled to any of the reward as you will not be an owner of the property if it sells at a profit??
 
Good to know your relative can confidently predict property prices in five years time.
 
Tell your relative YOU'll be consulting a solicitor of YOUR choice to get impartial advice, and that you expect him to foot the bill...then do so.
 
I don't understand how you are a co-applicant but not a co-owner?

SUrely if you apply for a mortgage and are successful, then you owe the bank that oney with teh property being used as security.

WHat if he dies and the value of teh property decreases?
You may very well be in negative equity then.

Also - this whole selling on in 5 years time for a profit?
That was yesterdays trick. The times have changed. That is by no means guaranteed.

Also - I am nearly 100% certain that if you have bought or only bought a property anywhere in the world then you lose your FTB status.
So unless this co-aplicant thing gets you out of it somehow?
But as I said, that is something i have never heard of before anyway.Not at all sure that technicality eixsts even.
 
Thanks for the replies

I've consulted with 2 solicitors both of whom offered conflicting advice.
One thinks that as my name will not be on the deeds of the property then my FTB status will not be effected.
The other thinks that as my name will appear on the mortgage I will forfeit my FTB status.
I then spoke to the revenue. Initially they said it should be fine as I wouldnt be on the deeds or paying into the mortgage. But having consulted with their senior collegues they decided that it would in fact mean I would no longer be classed as a FTB.

Its all very Irish!

Ive decided not to sign as a co-applicant in the end, its too big a gamble to take as a favour to my relative.

Thanks for ur help anyway!
 
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