As expert mortgage brokers, we deal with borrowers in this situation regularly. A change in personal circumstances can easly affect a proven track record when financial ties are broken, and without covering payments on joint mortgages real damage can be done to both parties credit scores and with their current mortgage provider.
Removing a name from a joint mortgage – UK
There are many reasons for removing a name from a joint mortgage (UK):
- Separation
- Divorce
- The removal of an investor
- A buyout
- Handing over the property to a single party
- A parent or family member leaving a joint mortgage
- Transferring equity to a new party
- A pay-out or transfer of equity to a leaving party or ex partner
How to remove someone from a mortgage (UK)
The process of removing yourself or someone else from a joint mortgage is relatively simple and straightforward—as long as everyone is in agreement and wants the same result.
There are two parts to take care of: the first, the legal paperwork carried out by solicitors or conveyancers, and secondly, rearranging the mortgage to accommodate new terms.
The legal process
Your solicitor will send the necessary transfer documents under their standard remortgage package. Remortgaging involves a basic legal fee of around £100–£200.
If everyone agrees to the new terms, approval is a simple and quick event as long as all paperwork is present.
Sadly, if there is friction between parting partners, the cost can be far higher, with legal challenges and possible court action extending the time to an agreement and far greater fees. Wherever possible, work together to find amicable solutions. All parties will be far better off in the long run.
The mortgage process
Removing a name from a mortgage is a very similar process to remortgaging. You’ll need to let your existing mortgage lender know the changes you’re planning so that they can carry out calculations, ensuring you can afford to meet their lender criteria and monthly payments.
The process is clean and easy if you can meet the existing requirements.
If not, you will have to change the terms of your mortgage to come up with manageable repayments or search for an alternative provider that can offer you a better deal.
It’s definitely worth exploring the market at this point, as there are mortgage products for every type of borrower. Given your situation is changing quite considerably, speaking to an experienced mortgage broker will provide you with all the information you need to figure out the best deal for you and your next move.
Remember, there could be early repayment charges to pay if you’re still in a current deal, so switching to an alternative product needs to cover those costs while still leaving you in a better financial position.
Buying someone out of a joint mortgage
When buying someone out of a joint mortgage, there will be a transfer of equity.
Joint mortgages dictate shared ownership of the property, so when one party leaves the contract, they’re entitled to their share of the equity the property has already accrued.
If all parties agree, the solicitor provides paperwork for the transfer of equity once the new mortgage is agreed upon (from an existing or new lender).
The balance will be paid through the solicitor on completion, taking into account the legal fees. The process can take up to one or two months in total, but with an expert mortgage advisor and solicitor in your corner, it can be much quicker than you imagine.
Where there is enough equity in the property, the partner taking on the mortgage can often find themselves making even lower payments.
Removing a name from a mortgage without refinancing
If you’re in a position to take over the mortgage without changing the payments or the term, that makes the process simpler still.
Your mortgage provider must carry out their usual checks to ensure your income and expenditure meet their criteria. If everything’s okay, the paperwork is updated, and the payment schedule remains unchanged.
Removing someone from a mortgage who isn’t paying their share
Sadly, it’s far too familiar that one party fails to keep up their side of the mortgage. The main thing to ensure when this happens is that the full payment is made each month to protect your credit report.
When your partner isn’t paying their share, speak to your provider immediately. You might be able to take a ‘mortgage break’ or ‘mortgage holiday’ while you make the necessary changes or move on to a short-term solution to protect your home and credit score. Some mortgage lenders will help you by transferring you onto an interest-only option until you can regain control of your circumstances.
The outcome is the same whether you are paying your share or not.
If your monthly mortgage payments aren’t paid in full, you risk losing the property. In this situation, you need to take over the mortgage, sell up and move, buy each other out, or find some way for the non-paying party to fulfil their obligations.
If you fail to meet the combined payments, even if you’re paying your share, the failure will go on both parties’ credit reports, regardless of who’s to blame. Defaults on mortgage payments are serious black marks on your credit history and can cause real problems for future mortgage or loan applications.
How can I take my name off a joint mortgage?
If you need to remove your name from a joint mortgage, the best thing you can do is make it as simple as possible for your mortgage partner to carry out the task. This is a typical request when removing a name from a mortgage after divorce (UK).
The responsibility of removing your name from the mortgage and land registry lies with your partner. Still, for many, it requires support and organisation to help them through the process in what can be a difficult time.
- Ask them to buy you out
- Consider selling the property and splitting any equity
- Ask if they’d like to take over the mortgage
- See if they’d like you to sell their share to a third party
If you can help them gather all the information they need and support them as they discuss their next step and options, it goes a long way to resolving the situation as quickly and efficiently as possible.
Remortgaging and mortgage buyouts
With a good mortgage advisor or a specialist mortgage broker like CLS, practically all situations have solutions. Taking over a mortgage when buying out a previous partner or investor might take some juggling, but with a little good advice and some sensible number crunching, you can soon find yourself the sole property owner without too much fuss.
When it comes to reorganising your mortgage repayments, you’ll need to be able to show the following:
- You can afford to cover the payments on your sole income – which could mean switching to a mortgage deal that reduces your monthly payments or even boosts them if you’ve got a new partner or investor on a higher income.
- The new mortgage total covers any buyout costs and early repayment penalties.
- There’s enough equity in the property to cover the buyout costs and early repayment penalties.
- Your credit score qualifies you for the mortgage you need.
If you’re not sure or don’t think you can cover the mortgage, don’t despair. There are hundreds of mortgage providers who cater for every kind of eventuality. Taking a name off a mortgage (UK) is a common situation, so there are always solutions at hand.
If you need help with your current situation, CLS can provide mortgage advice for every eventuality. Our expert advisors will advise when is the right time to seek legal advice if a partner refuses to accept liability, when to look for an alternative mortgage deal and how to get a mortgage approved on your own. Why not give us a call or drop us a line today?
