Joint borrower sole proprietor mortgage experience
Posted: March 15th, 2019, 12:57 pm
by Failedtheturingtest
My wife's sister is looking to buy a house in an expensive area in the southeast (aren't they all) and has asked for help in the form of a 'joint borrower sole proprietor mortgage'. I'd never heard of such a thing until this week, but having read up a bit on it, I understand that she's asking us (well, she's asking my wife, but if course it affects me too!) to be something like a guarantor, although the requirements seem slightly less stringent than being a guarantor. In particular, there is no requirement to put up collateral in advance. However, the risk is quite clear: if she doesn't keep up payments for any reason, we as the sponsors will become responsible, and yet we have no claim on the property itself.
The more I learn about it, the more I am opposed to it. But does anyone have any experience with this form of mortgage, either positive or negative, that might help us decide what to do? And are there any other, less risky, ways of helping a sibling with a house purchase that we might not have thought of?
Re: Joint borrower sole proprietor mortgage experience
Posted: March 15th, 2019, 5:28 pm
by chas49
Have a look at this current topic in Legal Issues which covers a similar (ish) scenario
viewtopic.php?f=2&t=16756
Re: Joint borrower sole proprietor mortgage experience
Posted: March 15th, 2019, 7:31 pm
by PinkDalek
chas49 wrote:Have a look at this current topic in Legal Issues which covers a similar (ish) scenario
viewtopic.php?f=2&t=16756
Interestingly enough, wouldn't the OP over there be better directed to the question raised here?
That's assuming I haven't got all the potential parties confused.
Re: Joint borrower sole proprietor mortgage experience
Posted: March 16th, 2019, 2:44 pm
by chas49
PinkDalek wrote:chas49 wrote:Have a look at this current topic in Legal Issues which covers a similar (ish) scenario
viewtopic.php?f=2&t=16756
Interestingly enough, wouldn't the OP over there be better directed to the question raised here?
That's assuming I haven't got all the potential parties confused.
Possibly - but the other thread already has replies and this one doesn't (apart from this slightly off-topic diversion
)
Re: Joint borrower sole proprietor mortgage experience
Posted: March 17th, 2019, 10:33 pm
by Failedtheturingtest
I've discovered an alternative that seems like it might be preferable: to contribute money towards a deposit and set up a 'deed of trust' which would give us a legal charge on the property, i.e. bring part-owners rather than just guarantors on the mortgage. Does anyone have any experience with that as a way of helping a family member buy a house? Based on my initial research it seems that this would be less risky and could even give us the ability to share in any gains from eventually selling the house, whenever that night happen.