Loan agreement

[LucyC]

Hi, I'm after some advise please. Long story short...ish I am separating from my long term partner, my sister lives in Australia and is helping me by buying my ex partner out we were wanting to put her on the morgage but as she lives overseas that has turned out to be harder than we thought, so my brother has kindly offered to go on my morgage with me for affordability needs he lives with my parents and owns no property, we have had a morgage offer with current lender and in the process with the conveyancing solicitor for transfer of title. We have hit a brick wall though as I wanted something legal in place to state that the money from my sister would be paid back plus interest if/when property sold in the future not sure why this is so difficult to do? She did sign a gift letter as requested by lender who wanted to ensure I didn't need to pay her back monthly and that I could afford my morgage payments, but my sister was honest and said she would want the money back with interest on sale of the property. Any advise so welcome just desperate to complete now. Lucy

[atticus]

I do not understand why (for a fee) your solicitor is not able to prepare a simple agreement. I used to do this kind of thing regularly when I was in practice.

[Pezza54]

Hi
Is your brother going to be a joint owner with yourself or a guarantor?

The lender will want to put a charge on the property in case you default on the mortgage payments. This would mean that if you were unable to make payments they could eventually take possession and sell the property.

Understandably your sister also wants her loan secured on the property. This is why the lender wanted your sister to confirm the money is being gifted to avoid 2 charges on the property. It is possible to have more than one charge on a property but in this case the lender is objecting.

You could ask for the conveyancing solicitor's advice. Would your sister be prepared to lend you the money with a loan not secured on the property?
If your sister is not prepared to provide an unsecured loan, is there another relative who may be agreeable to being a guarantor to your sister's loan?

[LucyC]

I agree seems pretty straight forward to me, originally she said a trust deed could be written up but since speaking to her head of department has said not possible. Do you think my sister could get her own solicitor and they would write something up? Seems to be all focused on the 'gift letter' but my sister did state what she wanted and the morgage was offered regardless.

[LucyC]

He's coming on as joint owner legally as seemed easiest way but has no interest in the property at all just wants to help keep me and kids in our home. I was desperate to renew morgage as runs out end of the month then on to variable rate which is nearly times the current monthly payment. When I asked lender about the money given from my sister I kept getting the same reply that I was to get legal advise on that matter, but the conveyancing solicitor won't touch it?

[LucyC]

*3 times

[atticus]

2 further points:

1. Check the wording of the "gift letter". I am looking at a Nationwide "gifted deposit" form. This allows for the possibility that the money provided by the family member is a loan secured by a subsequent charge.

2. If your brother is "going on the mortgage" then he is going to be a joint owner and jointly liable for repayments. This may also prevent him getting his own mortgage at some later date. Is this really what you and he want?

3. (Bonus point) You need solicitors who will give you advice. You get what you pay for.

[LucyC]

Will check the gifted letter writing morgage is with natwest, yes hes absolutely fine with it and in absolutely no rush to leave my parents! Hopefully can remortgage again in just my name once finances are settled. Yes agreed I am asking questions but getting very frustrated by the lack of options and advice being given back to me. My sister said get another solicitor but im reluctant as ive invested alot of time already paperwork etc written up and want it completed ASAP, my ex partner still living here until he recieves funds so as you can imagine it's super stressful. My dad is going to see a solicitor tomorrow on my sisters behalf to see if something can be done her side.

[LucyC]

Checked gift letter natwest literally just asked for a gift letter from my sister to be uploaded to my application she clearly states the amount and that she expects no monthly payment but the amount plus interest on sale, My solicitor says there's no mention of this in the morgage offer and is working for me snd the lender so will therefore need to inform the lender of this as it is clearly not a gift.

[atticus]

Then he needs to do that.

When I was in practice I regarded my role as being to help my clients achieve their objectives.

[LucyC]

Thank you so much for your advise, I do feel that it's slightly more complicated so there not interested, when I am paying for a service that's not yet being provided.