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Can I remortgage on an unencumbered house ????
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# 1
Nightlight
Old 26-02-2010, 2:23 PM
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Default Can I remortgage on an unencumbered house ????

Apologies if this is in the wrong place !!!!

Is it possible to take out a mortgage on an unencumbered house? (think that is the correct term - I own it outright - I have no mortgage on it)

I've been told that I can and I can't (on both counts, just by friends and not by a professional). I, at the moment, am a stay at home Mum with pre - school children and am not working. My husband is in regular employment but his name is not on the deeds to the house etc, the house was mine before we met. If we are able to take out a mortgage on my house (we'd want to borrow about 20,000.00 - 25,000.00 my house is valued at approx £200,00.00) would the house have to be in his name too??

Im a real fish out of water when it comes to mortgages etc and would appreciate any help /advice anyohne could offer
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# 2
Matt1982
Old 26-02-2010, 2:27 PM
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Yes, should be fairly straight forward, have a chat with a whole of marker broker.

If you have no income then would have to be in joint names. If you have income possible you can do in your name only.
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# 3
Conrad
Old 26-02-2010, 2:39 PM
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Well I've just done one this morning for a free lance journalist so I hope so!!
I run my own specialist finance consultancy for those with complex issues. I am not FCA regulated (by choice). I mention this as some users like to run things by me. I do not offer advice, only information.
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# 4
Nightlight
Old 26-02-2010, 2:41 PM
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Thanks both of you - was worried someone would just laugh in my face !!!!!
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# 5
Wutang
Old 26-02-2010, 2:48 PM
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Quote:
Originally Posted by Nightlight View Post
Thanks both of you - was worried someone would just laugh in my face !!!!!
Wear a skiing outfit and a snorkel when you see the adviser and this can still happen.
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# 6
Leon W
Old 26-02-2010, 2:52 PM
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As Matt says, the only fly in the ointment is if you have no admissable income which, as you are a stay at home mum, might be the case.

This would mean adding your other half to the title deeds as they must be the same as the names on the mortgage.

Now, as your house is unencumbered and the mortgage is small then considerable care should be taken when choosing a mortgage. Some lenders treat unencumbered as any other "remortgage" and will offer free valuations and free legal fees etc, a benefit definately worth having.

Some lenders will treat it as a purchase and you will have to foot the bill for your own legals and valuation fee, and with such a small mortgage, these would add up to a considerable percentage of the loan amount.

Also, do not go for cheapest rate. You do not want to be looking around for another mortgage in a few years time because you took a "cheap" introductory fixed or tracker as it is an excuse to lump on more fees if switching lender again (many wont even take mortgages that small). No, it's best with a small mortgage to find the cheapest mortgage for the long term overall.

regards

edited to add: even with a "free" legal package there will probably be a charge for adding a name to the Land registry.
I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

Last edited by Leon W; 26-02-2010 at 2:55 PM.
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# 7
Conrad
Old 26-02-2010, 2:55 PM
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SORRY I DIN'T READ YOUR OPENING POST PROPERTY.

Now I see you say you don't earn, which means a traditional mortgage is not possible in your name alone.

To safeguard your equity you can draw up a separate legal document (not to be done with the lawyers dealing with the mortgage) setting out your 'articles of association' if you like.

Adding your partner will involve additional legal fees as he is effectively buying into a property.
I run my own specialist finance consultancy for those with complex issues. I am not FCA regulated (by choice). I mention this as some users like to run things by me. I do not offer advice, only information.
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# 8
getmore4less
Old 26-02-2010, 3:29 PM
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Why get into debt?
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# 9
Nightlight
Old 26-02-2010, 4:39 PM
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Quote:
Originally Posted by Wutang View Post
Wear a skiing outfit and a snorkel when you see the adviser and this can still happen.
Thanks for that !!!!!!!!!!!!!!!!!!!!!!!! Lol
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# 10
Nightlight
Old 26-02-2010, 4:41 PM
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Quote:
Originally Posted by getmore4less View Post
Why get into debt?
Dont really want to get 'into debt' but desparately need to do stuff around the house - like rewire - add a proper kitchen and bathroom and need to clear a credit card - been told this would be the best way to do it. *shrugs shoulders*
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# 11
Debt_Free_Chick
Old 26-02-2010, 4:46 PM
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Quote:
Originally Posted by Nightlight View Post
Dont really want to get 'into debt' but desparately need to do stuff around the house - like rewire - add a proper kitchen and bathroom and need to clear a credit card - been told this would be the best way to do it. *shrugs shoulders*
No, it's not the best way to do it.

The best way is to rein in your expenditure and save up what you need.

Taking out a mortgage is possibly the worst option! Firstly, the loan will be for a long time (20 years maybe?) so you'll be paying interest all that time, which means that you could end up paying £20k for a £10k loan

Worst still, you are putting your house in hoc! If you fail to keep up all the repayments, you could end up losing your house, just for the sake of a "proper kitchen and bathroom and ... a credit card".

Really - not a good idea at all.
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# 12
Nightlight
Old 26-02-2010, 4:47 PM
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Quote:
Originally Posted by Leon W View Post
As Matt says, the only fly in the ointment is if you have no admissable income which, as you are a stay at home mum, might be the case.

This would mean adding your other half to the title deeds as they must be the same as the names on the mortgage.

Now, as your house is unencumbered and the mortgage is small then considerable care should be taken when choosing a mortgage. Some lenders treat unencumbered as any other "remortgage" and will offer free valuations and free legal fees etc, a benefit definately worth having.

Some lenders will treat it as a purchase and you will have to foot the bill for your own legals and valuation fee, and with such a small mortgage, these would add up to a considerable percentage of the loan amount.

Also, do not go for cheapest rate. You do not want to be looking around for another mortgage in a few years time because you took a "cheap" introductory fixed or tracker as it is an excuse to lump on more fees if switching lender again (many wont even take mortgages that small). No, it's best with a small mortgage to find the cheapest mortgage for the long term overall.

regards

edited to add: even with a "free" legal package there will probably be a charge for adding a name to the Land registry.
Thanks very much your help ......really wanted to just keep me on the title deeds - maybe i'll just have to wait til I can return to full time work !!
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# 13
Nightlight
Old 26-02-2010, 4:52 PM
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Quote:
Originally Posted by Debt_Free_Chick View Post
No, it's not the best way to do it.

The best way is to rein in your expenditure and save up what you need.

Taking out a mortgage is possibly the worst option! Firstly, the loan will be for a long time (20 years maybe?) so you'll be paying interest all that time, which means that you could end up paying £20k for a £10k loan

Worst still, you are putting your house in hoc! If you fail to keep up all the repayments, you could end up losing your house, just for the sake of a "proper kitchen and bathroom and ... a credit card".

Really - not a good idea at all.
Hi thanks ....yup I can see where you're coming from totally but I seem to have been reining in everything for ages at this rate I might get straight by the time the kids give me some grandchildren !!!!!
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# 14
Matt1982
Old 26-02-2010, 5:10 PM
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You can have the mortgage on a shorter term than 20yrs if that is affordable to you.

If you want to keep property just in your name then you will need to wait until you have some income.

Good luck whichever path you decide.
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# 15
Nightlight
Old 26-02-2010, 5:22 PM
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Quote:
Originally Posted by Matt1982 View Post
You can have the mortgage on a shorter term than 20yrs if that is affordable to you.

If you want to keep property just in your name then you will need to wait until you have some income.

Good luck whichever path you decide.
Thanks very much Matt you've been really helpful !
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# 16
happybroker
Old 26-02-2010, 5:31 PM
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It's been a hell of a while since I've done one but a handfull of lenders used to allow the mortgage to be joint and the deeds in just one name. This is called "borrower non-proprietor". Woolwich were certainly one of them, so were Igroup.

The party that was not on the deeds would need to take independant legal advice and sign a waiver.

Like I say, this was some time ago and wasn't the norm at all but used to be doable. Some of the smaller building societies may be able to take a view on it possibly. A whole of market broker would be able to find out but may want a fee for the work as the commission would be neither here nor there on a mortgage that size.
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# 17
Leon W
Old 26-02-2010, 6:16 PM
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Debtfreechick.

Not all debt is bad debt !

If the OP was going on holiday or going to P*ss the remortgage money up the wall I would agree with you !

However, they seem to be intending to make home improvements. Now, the OP says they need to rewire, fit new bathroom and kitchen which indicates to me the house could be in a pretty tired state (no offence if it is not) and making these improvements is likely to increase the value of the house more than the sum needed to improve the property and improve its' sales potential if needed.

I find some people quite odd, they generally make these sort of improvements when they come to try and sell the house because they find it hard to sell or prospective buyers will immediately say "it needs a new kitchen, bathroom,rewire etc" and knock you down accordingly (sometimes the mortgage valuer will do it aswell), so people improve and get no benefit whatsoever as it's the new buyers who get to use the new kitchen etc.

If the OP can afford it then why not ?
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# 18
VIGILANT22
Old 26-02-2010, 6:18 PM
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borrower non-proprietor...yes Woolwich did... as did Nat West
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# 19
Nightlight
Old 26-02-2010, 6:32 PM
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Quote:
Originally Posted by Leon W View Post
Debtfreechick.

Not all debt is bad debt !

If the OP was going on holiday or going to P*ss the remortgage money up the wall I would agree with you !

However, they seem to be intending to make home improvements. Now, the OP says they need to rewire, fit new bathroom and kitchen which indicates to me the house could be in a pretty tired state (no offence if it is not) and making these improvements is likely to increase the value of the house more than the sum needed to improve the property and improve its' sales potential if needed.

I find some people quite odd, they generally make these sort of improvements when they come to try and sell the house because they find it hard to sell or prospective buyers will immediately say "it needs a new kitchen, bathroom,rewire etc" and knock you down accordingly (sometimes the mortgage valuer will do it aswell), so people improve and get no benefit whatsoever as it's the new buyers who get to use the new kitchen etc.

If the OP can afford it then why not ?
Im not planning on selling etc .... basically I was lucky enough years ago when I was young to have a good job and was able to buy a property outwrite.... but at the time was'nt smart enough to get things done ....partying was far more important to a young twenty something !!!! .... years later after and i chose to stay home and look after my kids while they were babies etc, I wish I'd been smarter back then ! But now following several knock backs of all sorts of situations and redundancies (ol man), we'd like to improve the property while it is of benifit to us - ie while the kids are at home - and clear a couple of credit cards !

Thanks everyone for all your help - have to admit I've gone from "yay" to " oh what do I do now" and back to "yay....i think!!" just since i posted the original post !!!!!!!!!!!
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# 20
getmore4less
Old 26-02-2010, 6:32 PM
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Quote:
Originally Posted by Nightlight View Post
Dont really want to get 'into debt' but desparately need to do stuff around the house - like rewire - add a proper kitchen and bathroom and need to clear a credit card - been told this would be the best way to do it. *shrugs shoulders*
£20-£25k seems a lot perhaps a break down

rewire?
kitchen?
bathroom?
CC debt? (why has this mounted up?)
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