Property: Home truths
Sunday 07 June 1998
I am looking to take out my first mortgage. However, I have been advised that I may run into difficulty because I am employed on a six-month contract, although this has been renewed for the last five years. Will this be a problem?
Miss E Bell, Leeds
Many people are now employed on renewable fixed-term contracts, and this should not seriously affect your application for a mortgage. Five years is certainly enough time to demonstrate the reliability of the employment.
I am a self-employed builder looking for my first property. I have been told that I cannot have a mortgage as I am not yet able to product three years' audited accounts. I recently heard about self-certification mortgages. Could this be the answer?
Philip Lyle, Bristol
Self-certification mortgages can be a way forward in certain circumstances for the self-employed, particularly if the business is in its infancy. With this type of mortgage the lender relies on your statement of income without reference to audited accounts. However, it will need to see evidence that you are generating enough income to meet the monthly mortgage payments.
Usually you will need to supply a bank reference and, in some cases, six months' bank statements. If you have had a mortgage in the past, a lender's reference may also be needed. If you are currently living in rented accommodation, the lender could seek a reference from your landlord. Credit searches would also be carried out by the lender.
Passing on property
My husband and I both have children from previous marriages and each of us would like to pass our share of the property on to our respective children, rather than to each other, when one of us dies. We have been told by a friend that this is possible. Is it, and could you explain how we go about arranging it?
Mrs S Foster, West Midlands
Your friend is right. The position you describe is known as "tenants in common". This is where one of the joint co-owners dies and ownership of their share in the property does not pass to the surviving co-owner, as is normal, but to another party. The tenants-in- common agreement is usually established when you buy your property, but your solicitors will be able to take care of this for you.
It is also possible for the agreement to allow the surviving owner to remain in the property for as long as he or she wishes. This helps to eliminate the possibility of a family feud where the person who takes ownership following the death of a relative or friend wishes to sell the property to release the equity, whilst the remaining party wants to carry on living in the house.
It would be worthwhile to seek the advice of a solicitor who will be able to explain in greater depth how the process works and how to go about setting up an agreement.
q George Wise is managing director of NatWest UK Mortgage Services.
q Send your queries on practical property issues to: Home Truths, 'Independent on Sunday', 1 Canada Square, Canary Wharf, London E14 5DL; fax 0171-293 2043; e- mail firstname.lastname@example.org.
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