Q&A; Removing a party from a joint mortgage
Author: Andy Bedford » Publish Date: 30 October 2009
Question; I have a joint mortgage currently; we want to change it to being solely in my name or my partners; what do we need to do?
Firstly you need to establish whether your existing mortgage is still within any tie-in period and what penalty for early repayment may apply.
Then you need to check with the lender whether they are happy for the mortgage to transfer to a sole basis, which will mainly come down to their assessment of whether it is affordable to you as a single applicant.
They will re-assess the affordability of the case as if it was a new mortgage. If they are happy you can afford it alone, then the land registry and title will need amendment and a new mortgage contract issued.
That process will require a solicitor or conveyancer to act; you will have to pay for a transfer of equity, usually costing a few hundred pounds.
Depending on the size of the mortgage and the property valuation, it is possible stamp duty may also be chargeable. You should consult your conveyancer on this aspect, as it is a complex field.
However, if the lender is not satisfied the loan is affordable to you alone, they can refuse to remove a party from the loan. That would mean finding a different lender and paying any early repayment penalties to change if a suitable option is available.
If an early repayment penalty is due to end within a few months, you may be able to arrange this as part of a normal remortgage and defer completion until the penalty ends. If it ends more than six months from now, or if you require the release of the other party sooner, you have to pay any applicable penalty.
As well as affordability, the lender will usually re-assess you as a credit risk and possibly the property value.
If you are considering transferring a party from a loan due to bankruptcy proceedings, the solicitors will be made aware of this, and the transfer will not be possible.
As usual, if you need further information about this call 0345 4594490 to speak to a mortgage advisor about your circumstances.