Can I get a mortgage on our house despite an included trust deed?

Posted on 20 July 2007

My husband has a trust deed that we want to split up as he says that I can keep the house. That means i would have to find a mortgage in my name only - can this be done with him having the trust deed?  I want to stay in the same house with my 4 kids.  I am self-employed and have been for 9 months with no accounts yet - could you advise me please?

Hello Liz,
 
My understanding of properties with included trust deeds is that as long as you have been married you have rights and can split the trust.  You need to speak to a solicitor for a formal assessment as I can't give legal advice but my limited understanding is that your partner and any trustees would have to agree to remove the house from the trust so that you can mortgage it without him having to have an interest in it.  It counts as the trust selling it to you, for just the amount of the mortgage that is currently on it, which you are replacing with your own mortgage.  Even if the property is worth more, you would be buying it at the value of the mortgage as far as lenders are concerned.  You should also seek tax advice from a solicitor about your position on stamp duty: if you are buying at less than £125,000 you may be exempt.
 
As for the mortgage, you will be theoretically borrowing 100% of the actual property sale price which means that you need a lender who will look not at the sale price but the property's real value.  You need to negotiate with a lender outside of their normal criteria on this as the ones that will lend on true property value don't allow self-certifying, which is what you need by the looks of it.  However, as you have a legitimate reason to be buying only at the mortgage amount and not the true value of the property most lenders will take a view on this for you.  Ensure that you have a good broker fighting your corner on this.
 
Katie

Categories: Self-certification, Trusts

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