There may come a time when your circumstances change and you need to add or remove someone from, or to, a joint mortgage. Let us guide you through what’s involved.
When does a change to borrowers apply
You can speak to us about changing borrowers, known as a Transfer of Equity, in the following circumstances:
- If you get married and want to transfer a sole mortgage into joint names.
- If you get married or separated and want to transfer a joint mortgage into the sole name of one of the joint mortgage holders.
- Removing one of the joint mortgage holders and adding someone else.
- Adding a new borrower if a sole mortgage holder has passed away.
You should obtain legal advice if you need to make a change to your mortgage due to one of these circumstances. And of course transferring a mortgage will also involve transferring the property ownership as well. Our conveyancing service allows you to search for a solicitor to help you with the legal side of things.
If you want to transfer the property ownership and mortgage into your sole name due to any of the circumstances above, you will need to be able to prove to us that you can afford to pay the mortgage on your own.
If you take out a joint mortgage with another person you are both equally liable for the repayment of the mortgage loan. In the case of divorce, you have a number of options you may want to discuss with your partner, including transfer of equity:
- If you or your partner decide to stay in the house, the person who stays in the property would need to go through the process to transfer ownership into their sole name. This would include one partner buying out the other – a valuation of the property's current value would be needed in this scenario.
- You can decide to sell the house and divide the proceeds between you. This is sometimes the easiest and fairest option but does rely on putting the house on the market for an unknown length of time. The proceeds from the sale would be used to repay the mortgage and any money left over would then need to be split between you (similar to any shared assets).
- If the mortgage doesn't have long to run you may decide to continue making the mortgage payments with your partner, providing you both ensure that the mortgage payments are made.
It's important to note, that whilst you are in the process of making any decision, you need to ensure that the mortgage is still being paid. Any missed payments may affect your and your partner's credit reference file.
What is a transfer of equity?
As our circumstances change we may find that we need to apply for a joint mortgage or to make changes to an existing joint mortgage. Transfer of Equity refers to making a change to the names on a mortgage either to add or remove someone on the mortgage. It doesn’t usually include any additional borrowing or other changes to the mortgage terms.
In some instances this is necessary due to divorce, separation or if there has been bereavement in the family. Or you might decide to add someone to your mortgage if you get married or want to live together.