Does co-signee mean co-owner?

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pbyrne

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Hi Everybody,

Have a question from a non-Internet enabled friend - here is the situation:

(1) They bought a house a while back and got a family member to become a 'co-signee' of the mortgage. However the co-signee has not contributed to any of the monthly payments and apparently they were required on the mortgage as my friend could not get the amount they needed on their own.

(2) The friend would now like to get the property re-mortgaged so that they are the sole owner / signee of the mortgage

BUT

(3) The co-signee is now looking to buy a property of their own and does not want to be taken off the original mortgage as they would like to "lump that property into my assets so that I can borrow more".

Not knowing anything about the area I would have said it all depends on whose name is on the mortgage deeds - my friend reckons that only their name is on the deed and the co-signee is not on the deed.

If that is the case am I right in thinking the co-signee could not use the property as any kind of security or even for assesment purposes on their own new purchase.

Apologies if I have muddled any of the above - if it is not clear just let me know.

Many thanks for any opinions.
 
check threads about Revenue and Guarantor for some data, the co-signee may be classed as a guarantor by the revenue not an owner.

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Revenue Reassures First Time Buyers of Second Hand Houses

The position regarding claims for first time buyer relief where the purchase monies are not provided entirely by the first time buyer was addressed in material which was published on the Revenue website in April this year. The stamp duty treatment was included in an answer in a FAQ format as follows:
What is the position where the purchase monies are not provided entirely by the first time buyer?
To qualify for the relief the entirety of the purchase monies, including any borrowings, must be provided by the first time buyer. Any person, who provides part of the purchase monies or who is a party to any borrowings relating to such purchase, is also regarded as a buyer of the house and the relief will not be available unless that other person is also a first time buyer. …
This treatment applies whether or not all the parties providing the purchase monies, or all the parties to any borrowings, are actually named in the deed of transfer.
Notwithstanding this treatment, to take account of the particular circumstances which have arisen, Revenue is prepared to accept that a child, who is a first time buyer, will not be precluded from claiming first time buyer relief where a parent acts as a co-mortgagor in the following circumstances:
  • The transfer of the house is taken in the name of the child.
  • It is the intention of both the child and the parent that the parent is not to take a beneficial interest in the house.
  • The parent has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase.
  • It is not intended that the parent will be contributing to the repayment of the mortgage in the normal course.
Where the four conditions set out above are satisfied, Revenue will treat the parent as effectively acting in the role of guarantor for the loan.
Consistent with the above approach, Revenue will also be prepared to treat persons other than parents of the first time buyer, who satisfy similar conditions to those set out above, as effectively acting in the role of guarantor for the loan. Their involvement in that capacity will not be treated by Revenue as precluding a claim to first time buyer relief. In such circumstances the conditions are as follows:

  • The transfer of the house is taken in the name of the first time buyer.
  • It is the intention of both the first time buyer and the other person that the other person is not to take a beneficial interest in the house.
  • The other person has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase.
  • It is not intended that the other person will be contributing to the repayment of the mortgage in the normal course.
Revenue do not propose to seek a claw back of stamp duty where transfers have taken place before today which comply with either set of conditions outlined above.
Click to expand...
If the co-signee is not classified per above it could be messy , if they are related they would have been classified into something like the situation above I'll wager and may not have an interest in the property ...only in a shortfall .

Do clarify for us please what the co-signee is and what they have signed but I think they may have no title.

If the mate and the co-signee have a shared 'family' solicitor I would tell the mate to find another one NOW!
 
If I read it correctly, if the persons name is not on the deed, they have no rights with regard to the property. Going guarantor on the mortgage does not mean they own part of the house so it "is not part of their assets".
 
so if they guaranteed for an FTB under the revenue rules above its unlikely they are on the title...pbyrne will tell us I'm sure :p

The Co-Signee may be codding themselves here :D
 
The key sentence in this is 'the other person has been joined into the mortgage solely at the REQUEST of the lending institution'. In other words, the Bank/building society has to ask you to get a guarantor. A problem arises if you walked into the bank with the other person in tow and asked for joint mortgage. This should have been sorted before buying.

At any rate, this is the advice I was given. Check it out with your solicitor. Personally, I don't believe the co-signee in this case, has a leg to stand on.
 
Sunny said:
If I read it correctly, if the persons name is not on the deed, they have no rights with regard to the property. Going guarantor on the mortgage does not mean they own part of the house so it "is not part of their assets".
Click to expand...

If it is a guarantor situation then yes not being on the deeds probably means no interest but there are situations where someone might not be on the deeds but could have an interest, a solicitors advice may be needed.
 
When I bought my apt, I needed my Dad to go co-signee on the mortgage so I could get that bit extra. He agreed, but was asked to sign a letter and send it to the bank stating that he had no financial interest in the property.

If someone goes co-signee on a mortgage (as opposed to joint application) then the bank 'should' have asked for clarification as to their intent before proceeding.

I could be wrong but as far as I'm aware, my name is all that's on the title deeds.
 
Hi Everybody,

Thanks for the replies - few answers to some of the questions posed:

(1) Co-signee and owner are related, co-signee is parent, owner is child.

(2) I think you are right 2Pack - the co-signee seems to be a bit muddled (thankfully)

(3) I would agree with Sunny and reckon if they are not on the deed they are not able to count the property as part of their assets.

For my owner benefit can somebody clarify the difference between a guarator and a co-signee?

Thanks again for the info - will put my friends mind at rest until a solicitor gets engaged to sort it properly.
 
pbyrne said:
...
For my owner benefit can somebody clarify the difference between a guarator and a co-signee?...
Click to expand...
I don't think there is a difference :confused:. Just two ways of saying the same thing. I think they both mean that there will be two salaries available to pay the mortgage repayments therefore giving you a better chance of getting a higher mortgage, but that there is still only one owner.
 
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