Adding Partner to Mortgage

You may have a long term partner who you have been living with and are thinking about taking the next steps in your relationship and considering to add your partner to your mortgage.

It usually isn’t a problem because if you have a partner that can contribute financially, there is an increased chance of your mortgage loan being paid off, but it isn’t as easy as just adding a name so in this article we will discuss in further details the step that are required to add your partner to your mortgage.

Post Topics

How do I add my partner onto my mortgage?

Other things to consider when adding your partner to your mortgage

Joint tenants vs tenants in common

Next steps

FAQs

How do I add my partner onto my mortgage?

To start the process of adding your partner to your mortgage, you should approach your current mortgage lender and they will carry out checks on your partner just as they do for any other type of mortgage application. They will carry out income and affordability checks and check your partner’s credit score and credit history. If they are not satisfied with your partner during those checks, the lender has every right to refuse the request of adding your partner to your mortgage.

You can approach a new lender if you are not tied into a product with your current mortgage lender. If you are midway into a deal with your existing lender, there may be hefty exit fees so take this into consideration before deciding to switch lenders. Bear in mind, you will both be required to undergo the usual checks just like any other type of mortgage application. There is the potential that you may be able to access a better deal and interest rate by switching lenders.

There is also an option for joint mortgage with sibling which you can read on our website.

 

Other things to consider when adding your partner to your mortgage

A joint mortgage is mortgage taken with a civil partnership, life partner, sibling or friend. This means that both parties would need to sign up to the same terms. The main difference between a joint mortgage and a normal mortgage is that the borrower must have equal financial responsibility for the debt.

If one party defaults on their payments, then the other party will still be liable for the full amount of the loan. It is important to note that if one party does not pay their share of the monthly payment, then the other party could lose their home.

A joint mortgage or even a joint bank account will make two parties associated with each other so if one parties’ credit rating is poor, it might have an impact on the other parties credit score. This might make it more difficult to remortgage or take out other loans in the future. It is rational to discuss both your financial standings together first and checking both your credit history to ensure it won’t have a negative impact on each other.

A lender may charge you an administration fee for adding your partner to your mortgage and usually you will be required to seek legal advice to carry out the process of adding a partner to a mortgage so be aware that there might be added costs involved.

It is a wise idea to ensure any wills are up to date and amendments made if required. There is also a option for removing a partner when one partner enters a civil partnership with someone new which we will discuss in some other article. 

Joint tenants vs tenants in common

If you are considering on adding your partner to your mortgage, you will need to decide whether to hold the property as joint tenants or tenants in common.

Joint tenants or joint tenancy – this is the most common option for couples. Both parties have equal share in the property and is both equally and severally liable for the mortgage loan. This means if there are defaults in payments, the lender can sue either one or both people for the whole loan amount. In the event one person passes away, the property would be passed on to the other party and they wouldn’t be able to leave their part of the property to someone else in their will.

Tenants in common – generally this is used between friends or siblings who own a property together rather than a couple. How this differs from joint tenants is that the share of the property is split between the two parties, by a percentage split of their choosing (does not have to be 50% each). When the property is sold, the equity would be split between the two parties as per their percentage share. Tenants in common also has different legal implications compared to joint tenants. In the event of death of one party, their share of the property is not automatically transferred to the other person, but rather passed to the next of kin or named beneficiary.

In both instances, all tenants must be in agreement if they wish to sell the property.

Next Steps

If you are unsure of how to add your partner to your mortgage or what the best approach is, it may be easier to seek professional advice from a mortgage broker. If for any reason you are unable to add your partner onto your mortgage with your current lender, a mortgage broker can help analyse the reason and with knowledge of other lenders on the market, could potentially match you up with an alternative lender and find you a deal that is best for your own personal circumstances.

 

FAQ- Adding Partner to Mortgage

How to remove someone from a mortgage?

Removing someone from a mortgage is very similar to adding them, however, it does require some extra paperwork. The main difference is that instead of having to go through the legal process of changing the ownership of the property, you simply need to inform the lender that you want to remove someone from the mortgage.

This is done by sending a letter to the lender stating that you no longer wish to include your partner in the mortgage. You should also state why you are doing this.

How to remove an ex from the mortgage without refinancing? 

If you are wanting to remove your ex from the mortgage without refinance, then you will need to do so before the end of the term. It is important to note that if you do not do this, then your ex’s name will remain on the title until the end of the term regardless of whether or not he/she is still living at home.

How can I get my name taken off a joint mortgage in the UK?

You would first need to contact your bank and let them know that you want to take your name off the mortgage. They will then send you a form which needs to be completed and returned to them. Once this is done, your name will be removed from the mortgage.

How long does it take to remove my name from a mortgage?

It depends on the type of mortgage that you have. For example, a fixed rate mortgage usually takes around 2 weeks to complete. However, if you are looking to change your mortgage into a tracker mortgage, then it might take longer depending on the lender.

Can I remove my spouse from my mortgage?

Yes, you can remove your spouse from the mortgage. This is done by contacting your bank and informing them that you no longer wish for your spouse to be included in the mortgage.

How can I get my name taken off a joint mortgage in the UK?

As mentioned above, you would first need to contact the bank and ask them to remove your name from the mortgage. After this is done, you will need to make sure that your partner knows about this. To ensure this happens, you will need to write a letter explaining why you are taking your name off the mortgage and give it to your partner. Your partner will then need to sign the letter and return it to the bank.

What is Transfer of Equity?

Transfer of equity is when one party sells their interest in the property to another party. In order to qualify for transfer of equity, both parties must agree to sell their share of the property. The buyer will pay the seller the amount they paid for the house plus any outstanding payments that were made. The seller will receive the money and release all claims against the property.

What are the key stages of Transfer of Equity?

The key stages of transferring equity are:

1) Seller agrees to sell their share of property to Buyer

2) Buyer pays Seller the agreed price

3) Seller releases all claims against the property

4) Buyer receives funds and signs over deed

5) Property transfers to new owner

6) New owner completes necessary paperwork with local authority

How much does it cost to transfer equity?

The cost of transferring equity varies depending on the size of the transaction. Typically, the larger the transaction, the higher the commission. There are also other costs associated with the process such as stamp duty and legal fees.

Do I have to pay Stamp Duty?

Stamp duty is charged based on the value of the property. If the property has been purchased within the last three years, then there is no stamp duty payable. Otherwise, the stamp duty is calculated based on the purchase price of the property.

What happens when there is a mortgage on the property?

If there is a mortgage on a property, then the mortgagee will not accept an offer to buy the property until the mortgage is satisfied or transferred. This means that the buyer cannot close the sale until the mortgage is cleared.

Is it possible to sell my home without paying Stamp Duty?

In some cases, the government allows sellers to avoid stamp duty by using the “no stamp duty” scheme. Under this scheme, the seller must provide evidence that the property was bought before 1st January 2006. The seller may also be required to provide proof that the property was used as a residence for at least two years prior to selling. These requirements are subject to change so check with HMRC for the latest information.

What is the cost of adding someone to the mortgage?

When adding someone to the mortgage, the current lender will charge additional interest for the extra borrowing. For example, if you borrow £100,000 but add a person to the loan who only owes £50,000, then the lender will charge an additional 5% interest per year.

Can I get a discount on Stamp Duty?

There are certain circumstances where you can claim a discount on stamp duty. You should seek professional advice before claiming a discount.