What is a transfer of equity remortgage?

In that process of adding or removing names – and whether any money changes hands or not – you are transferring equity in the property. For that fact alone, you need to advise any mortgage lender with interest in the property of the proposed transfer of equity.

If the property is already subject to a mortgage, the person transferring ownership or equity needs to be released from the contract with the mortgage lender. The mortgage lender is – in these circumstances – one of the parties involved and therefore needs to give its consent.

When considering its consent, the mortgage lender needs to assess the remaining mortgagee’s income, expenditure, and creditworthiness – in other words, the affordability of the mortgage for the remaining mortgagee. Alternatively, a new lender may be found through the application for a new mortgage.

Effectively, the property is remortgaged – a transfer of equity remortgage – with the revised names on the property’s title deeds now also the mortgage holders. If the lender does not consent to the proposed transfer of equity the pre-existing contract remains, and the former joint mortgagee may still be liable for his or her share of the outstanding mortgage debt.

How do I change names on a transfer of equity remortgage?

Changing names on a transfer of equity is a legal process. If there have been two joint owners of a property, for example, and one wants to buy out the other to become the sole owner, that requires a legal change of names and ownership.

As conveyancing specialists Really Moving to recommend, the owner who is buying out the other party must be represented by a solicitor or conveyance. The owner who is being bought out may choose whether or not they want legal representation – but, as in any legal transaction, legal advice may be the prudent choice, opening up potential job opportunities for solicitors.

Where that transfer of equity also requires a remortgage, the lender must approve the application for the addition of a new name – or the removal of a former name, in the event of a change from joint to sole ownership.

When considering that approval, the lender is going to assess the affordability of the remortgage to the new or remaining mortgagees. That assessment is similar to any other calculation of affordability – it is based on the financial status of the proposed mortgagees, including their income and expenditure, handling of past and current debt and credit, and credit ratings maintained by the credit checks reference agencies.

When the terms of the equity transfer have been agreed upon – including any payments agreed between the parties – the agreement of the current mortgage lender can be sought or a remortgage with a new lender arranged. The transfer deed on the title of the property can then be signed and witnessed. The transaction is complete. If you are interested, you can also contact any specialist mortgage adviser to help you with your application process.

Can a joint mortgage be transferred to one person if I am self-employed?

As explained, the transfer of a joint mortgage to a sole mortgage involves an equity transfer – the name of one of the former joint owners is removed and a single owner remains. If the property is subject to a mortgage, the existing lender must approve the transfer of equity or a remortgage needs to be arranged.

If the person who is to be the remaining sole owner is self-employed, that is taken into account by the mortgage lender when assessing the affordability of the equity remortgage.

Self-employment helps to define your financial status and many mortgage lenders these days are accustomed to assessing the affordability of loans to the self-employed. Typically, for example, that assessment is likely to be informed by 12 months of your accounts in self-employment. If you are continuing in the same line of work as when you were employed, some lenders may even reduce the full, 12-month period of accounts.

How long does a remortgage and transfer of equity take?

The individual circumstances surrounding any change of ownership of a property, transfer of equity, and remortgage are likely to differ. This affects the length of time the transfer of equity and remortgage may take.

Solicitors Irwin Mitchell suggests that the process typically takes between four and six weeks – but, of course, this may be longer if the circumstances are more complicated.

Is stamp duty payable on a transfer of equity?

The calculation of Stamp Duty on a transfer of equity may be relatively complicated. At its simplest, Stamp Duty is usually payable on the amount of mortgage debt newly taken on – by a partner taking on joint ownership of a property as a joint mortgagee, for example. In other cases, though – such as the removal of a name following divorce or separation – it is unlikely that you will need to pay Stamp Duty.

Next steps

There are a number of reasons why you might want to change the names on the title deeds to a property.

The addition or removal of names is achieved through the legal process known as transfer of equity.

Where the relevant property is also subject to a mortgage, the mortgage lender must be informed of – and needs to approve – the proposed transfer of equity. The property is effectively remortgaged.

Here at Needing Advice, we are ready and waiting to help you through any such transfer of equity – including the implications for your mortgage.

Damian Youell

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FAQs – Changing Names on Mortgage

What is a change of name on a mortgage?

A change of name on mortgage is when you add or remove a person to your mortgage. This can be done for a variety of reasons, such as if you get married, divorced, or if you want to add a co-signer to your mortgage.

How do I change the names on my mortgage?

To change the names on your mortgage, you will need to contact your mortgage lender. They will be able to give you all the information you need, including the forms you need to fill out and the fees you’ll need to pay.

How long does it take to change the names on my mortgage?

The time it takes to change the names on your mortgage will vary depending on your lender. However, most lenders will process your request within a few weeks.

What are the benefits of changing the names on my mortgage?

There are a few benefits to changing the names on your mortgage, including:

  • You may be able to get a better interest rate if you have a co-signer with good credit.
  • You may be able to qualify for a larger mortgage if you have multiple people on the mortgage.
  • You may be able to make your monthly mortgage payments more affordable if you have a co-signer who can help you make the payments.

What are the drawbacks of changing the names on my mortgage?

There are also a few drawbacks to changing the names on your mortgage, including:

  • You will need to pay a fee to your lender.
  • You will need to provide your lender with proof of the new names on the mortgage.
  • You will need to sign a new mortgage agreement.

What should I do if I am considering changing the names on my mortgage?

If you are considering changing the names on your mortgage, it is important to speak to a mortgage broker or financial advisor. They can help you understand the process and ensure it is the right decision for you.

Can I change names on a joint mortgage?

If you need to change the name on your joint mortgage, the process can be a bit complicated and time-consuming. The first step is to contact your lender or loan servicer and find the documents required to make the change. You will likely need to provide proof of legal documentation such as a marriage certificate, divorce decree, etc., that reflects the name change.

If you are not aware of changing the names on a joint mortgage, then you can also contact a specialist mortgage broker to help you with your mortgage application process.

About The Author

mortgage broker damian youell

See some of Damian’s client reviews below

Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.