Mortgage Letter of Consent and Postponement
Discussion
On the home straight with regards our house purchase and my wife (not named on the mortgage) has been asked by First Direct to sign a letter of consent and postponement over the property. We were expecting it and am unsure whether she needs to sit down with a solicitor (as they suggest) or not.
As I understand it's simply to say that if I default on the mortgage and they want to take the house away then she has no claim over the property.
If I were to die however before the mortgage is repaid then the house would fall to my estate and its up to the executors to continue to pay the mortgage. If they didn't then again she would have to vacate the house.
On the basis that I have life assurance in place above the level of the mortgage then as long as the estate uses that to clear the mortgage upon my death then the house (free of mortgage) can pass to her.
Is it as simple as the above or are there potential banana skins to consider?
As I understand it's simply to say that if I default on the mortgage and they want to take the house away then she has no claim over the property.
If I were to die however before the mortgage is repaid then the house would fall to my estate and its up to the executors to continue to pay the mortgage. If they didn't then again she would have to vacate the house.
On the basis that I have life assurance in place above the level of the mortgage then as long as the estate uses that to clear the mortgage upon my death then the house (free of mortgage) can pass to her.
Is it as simple as the above or are there potential banana skins to consider?
Burrow01 said:
Obvioius question, but why are you not buying it in Joint Tenancy with her?
A frustrating legacy issue that's why! She bought a house (and is named on the mortgage ) with her bother before we got together and at the top of the bubble. We've tried to sell it a few times to leave her free to buy the new house with me but it's just going to cost us too much money to get rid of it. As such the house and mortgage is solely in my name but hopefully when the mortgage becomes unfixed 'her' house will be non existent (or her brother will be in a position to take it on his own) meaning we can explore switching it to joint tenants then.
Sarnie said:
If she's working there's no reason why she couldn't be on both. They would deduct the monthly mortgage payment from her income but as long as she earns more than the annual mortgage payment then it should be entirely possible.
Well that's the other problem she only works part time with her annual salary being less than the total mortgage payment on the house. It started to become complicated as it mean't that my salary multiple was starting to be 'attacked' for something that has nothing to do with me (and that doesn't cost us a thing as her brother has a mate renting a room off him). Safest option was just to leave her to one side for now and revisit it in 3 years. A few lenders were still funny about leaving her off as the underwriters would ask if your married why is she not on the mortgage? and then when you tell them about the other house they restricted the amount I could borrow. Luckily First Direct were happy and have been very smooth to deal with.
mx stu said:
Well that's the other problem she only works part time with her annual salary being less than the total mortgage payment on the house. It started to become complicated as it mean't that my salary multiple was starting to be 'attacked' for something that has nothing to do with me (and that doesn't cost us a thing as her brother has a mate renting a room off him). Safest option was just to leave her to one side for now and revisit it in 3 years.
A few lenders were still funny about leaving her off as the underwriters would ask if your married why is she not on the mortgage? and then when you tell them about the other house they restricted the amount I could borrow. Luckily First Direct were happy and have been very smooth to deal with.
Yeah, it's happened to me in the past. If you have a spouse who is not on the mortgage but living at the address they class them as a dependant and will reduce your affordability accordingly. Also, most lenders don't like a person living at the property if they have contributed to the deposit, as they can lay claim to a % of the property.A few lenders were still funny about leaving her off as the underwriters would ask if your married why is she not on the mortgage? and then when you tell them about the other house they restricted the amount I could borrow. Luckily First Direct were happy and have been very smooth to deal with.
Back to the original question then, I assume the requirement to pay off the mortgage from your life insurance is in your will
Main issue is to ensure that you both fully understand the implications in all scenarios - your death, her death, relationship breakup, children involved etc (cheerfull subjects....)
I'd imagine it could get messy if you break up and she has contributed to the deposit / mortgage payments etc
Whether you need a solicitor to cover all of this or not would depend on how confident you are that you have everything covered
Main issue is to ensure that you both fully understand the implications in all scenarios - your death, her death, relationship breakup, children involved etc (cheerfull subjects....)
I'd imagine it could get messy if you break up and she has contributed to the deposit / mortgage payments etc
Whether you need a solicitor to cover all of this or not would depend on how confident you are that you have everything covered
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