Declaration of Trust

I have a client who wishes to provide a large lump sum of money towards the purchase of a property. She cannot obtain a mortgage in her own right due to bad credit, therefore her partner is obtaining a mortgage for the balance of the purchase. My main concern is they wish to do a Declaration of Trust but the mortgage company will not allow this as she is not party to the transaction. A loan agreement has been mentioned, but I do not think this will suffice and could put my client in a very vulnerable position. If anybody has any suggestions that would be great and very helpful.

tristy pateman
Taylor Rose TTKW

Mortgage lenders are very sensitive about where the balance of funds for a purchase comes from and are quick to characterise anything which is less than transparent as fraudulent, if it may impede the realisation of their security.

I wonder if there is anything that can be done about your clients supposed lack of eligibility for a mortgage? Presumably there has been some significant change in her financial position, in that she now has a large lump sum available. If she can demonstrate a change in her fortunes and that she has dealt responsibly with the previous indebtedness, could a mortgage broker not help her find a lender who would accept her as joint mortgagor?

I agree that a loan agreement, without security, is unsatisfactory- it may even put her in a worse position than she would be without any form of agreement.

Tim Gibbons