Mortgages in Trust
Answered on 21 October 2017 by Nick Morrey
My daughter and her partner, due to wed next year, are potential first time buyers. We have set up a Trust Fund and propose gifting our former first home into it having just built a new house for ourselves. We are now both retired aged 64 and 61. Is it possible that they (the young couple) could get a mortgage to become part owners of the bungalow with the trust fund. The mortgagors having the first and only charge on the property. The proposal is for gradually in time for the trust fund to pass more of the ownership to the couple.
I know there are a handful of lenders who will consider lending to trusts, but I have never heard of a shared equity situation where a property is held in the joint names of a trust and private individuals.
The mortgage would have to be in the same names as the title deeds and this will depend on how ownership is registered. The trust would also have to be set up so that it is able to borrow money by way of a mortgage. You will need to speak to a specialist trust lawyer to determine how best to do this.
Please call 0330 433 2927 once armed with this information and we will be able to take your details and start contacting lenders to see who, if anyone, would be willing to lend.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.