Bank isn't going to be too bothered whether he's on title or not as long as they get good security on the property.
I thought if you used parents as guarantors then you lose FTb status anyway?
Don't think so. There's no legal transfer taking place. The property remains in my sole name. We'd just be taking a mortgage out together. Bank isn't going to be too bothered whether he's on title or not as long as they get good security on the property.
Plus - from your BFs pov - why would he do this if it was possible? Responsible for the debt but no legal standing on the property - he would be mad to go for it.
The rules unfortunately state that if either party in a new house purchase has owned a house before, anywhere in the world, then you have to pay stamp duty.
There's not much to it. I buy a house in my sole name by way of a mortgage in my sole name on which my parents act as guarantor. No stamp duty hit cos I'm a FTB.
Couple of months later, my (non-FTB) boyfriend and I apply for a mortgage which will be used to pay off the mortgage on which my parents are guarantor. Effectively I'd be re-mortgaging the property, bringing my boyfriend in as a co-Mortgagor and obviating the need for my parents to be involved in the property at all. No change in legal ownership. No transfer of the property. Property remains in my sole name.
I dont see how or why the bank would go along with this - it would effectively be putting his name on an unsecured loan if his name is not also on the deeds.
Plus - from your BFs pov - why would he do this if it was possible? Responsible for the debt but no legal standing on the property - he would be mad to go for it.
This type of thing may have been possible back in the days of banks giving out silly money - but I reckon its highly unlikely you'd get away with it in todays climate.
Also in these times, when you go and look for the second mortgage, even if you get it, it's possible that the banks valuation of your house will have gone down and you may not be able to raise the finance to clear the first mortgage.
The loan is still secured against the property regardless of whether his name is on title. From the bank's point of view, we're jointly and severally liable for mortgage repayments. If he defaults, then it's treated the same as if I defaulted. In that scenario, the bank can still move to take up their security on the property regardless of whether my boyfriend has a legal interest in it.
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