We are looking into as part of our financial deal me taking on our 2nd house (currently rented out). My intention would be to continue to let it as i can use the income to substadise my money.
However, my 2 questions (the 2nd one you may not know unless you''re an accountant)!!
1. is there a way legally for him to keep the mortgage (soley in his name) whilst having no claim to the property (unless i default on mortgage for example),
2. how would we then ensure that he wasnt up for tax liability on the rental income as i will be the only benefitting from this despite the mortgage being in his name?
1. You will need the consent of the mortgage lender to tranasfer the property from his/joint names to your sole name, and your interest wouldthen be subject to the mortgage. Why do you want it to stay in his name?
It would be possible for the property to be held in your joint names but on trust for you - that would mean that he would need to sign documents etc to sell the property (or to tranasfer it to you in the future) but you would be entitled to the whole of any proceeds of sale etc.
I think the key is to identify what you are trying to achive and why. If it is simply that you don''t qualify for the mortgage yourself, the simplest thing may be for him to act as guarator for the mortgge and for the mortgage and house to be in your sole name.
If the aim is that he pay the mortgage but you keep the rent, then the simplest way to deal with it may be for eveything to be put in your name and for you to have a separate provision for him to pay you maintenace (based on the amount needed for the mortgage)
If he agrees to keep a sole mortgage on a house which belongs solely to you and which you reap the sole benefit from, then he needs his head read.
If it''s his house and his mortgage then it makes sense for him to keep it. The tenants can either pay direct to you, or (safer option for you), the tenants pay him and he can pass it on to you by way of spousal maintenance.
We own 2 houses, both mortgages soley in his name (we did this on purpose).
The idea is that he keeps FMH and i would have the house we rent.
Most of the equity is in FMH, so i would also look at receiving a lump sum from this to make it fair.
As to the reason why i want to keep mortgage in his sole name, its purely down to fact that his mortgage (for now) is extremely low interest rate and for me to get same mortgage would cost me hundreds more pounds per month. If this is the case i would potentially have to look at him providing more money up front or worst case scenario look at pension sharing (i have none, he''s is substancial, but only want to do this if i absolutely have to, if i can get my own future financial stability i will leave this alone).
With my lump sum i would buy a small property (with my own mortgage) for me and my son to live in. Then in X years when rental house paid off that would effectively be my pension, therefore no need to request anything extra from him.
Also, it stops us both having to wait until FMH sells to get on with our own lives, its killing us!
Clear as mud now?
Like I said, he must have rocks in his head to agree to something like that. This whole thing is a really really bad way to do it. It leaves both of you with big gaping holes and financially dependent on each other.
What happens for instance, if he doesn''t pay the mortgage? It gets repossessed, and you lose your "pension".
What happens if you decide you want to cash in your "pension" now, but he refuses to sell?
What happens if he changes the mortgage to interest-only and reduces the equity to zero?
There are too many "what if''s" here. It''s a crazy solution. Much better to either sell the house, or one of you keep it (and the mortgage).