Take a name off mortgage

tru

Hi all, I don't visit up here very often :hello:

My brother and his wife have split up, they bought a house together a couple of years ago with a joint mortgage. They're still good friends though and have agreed a way to split things up. She moved out and said she didn't want the house, she'd like to take her name off the mortgage. My brother earns plenty and can easily afford everything himself, he's not buying her share, just putting it all in his name. He's been told that it's not that easy, something has to be transfered back to the mortgage people then transfered to him. Also he's been self-employed for 5 months and they want 2 years accounts which he obviously hasn't got, though he has a long-term contract with a firm who have written a letter for him saying they've guaranteed him so many days work each week for at least 2 years.

Isn't there an easier way to do this? They're more confused than ever and so am I

Robert_Sterling

The original contract for the loan was signed, I expect, by both partners.
The two partners are jointly and severally liable for the mortgage payments.
Thus if one has no money the other can be required to pay all of the mortgage. If one of the names is taken off the mortgage then the mortgage company has less security.

tru

Thanks Robert. Yeah, they both signed it but sis-in-law was training at the time and her wages were very low. My brother could have taken a bigger mortgage in his name only but they wanted everything to be in both names - newlyweds and all that I think the stumbling block is him being self-employed, even though he's earning more now than when they bought the house. They want this sorted ASAP, though they will wait until he has 2 full years of accounts if they have to.

Ian_W

Hi troo,
You're not getting a nose bleed being so high up? :rotfl:

I think you'll find that whilst they're both on the title, they both have to be on the mortgage. Reason being that if your bro defaulted on the mortgage the lender wouldn't be able to repo 50% of the house - half still being owned by his ex. The lenders almost certainly won't give permission for her to be removed from the mortgage ATM as their security would be worthless if she was.

Best bet is when they decide how to split their assets her name is removed from the deeds and at the same time the mortgage is converted to him alone. Obviously he needs to confirm the lenders are happy with his proof of earnings before that takes place.

homer_j_3

A transfer of equity is required. You just need to get your brother to approach his lender to see if on face value they can see any reasons why your Sister in Law cannot be removed? If they cannot then your brother will just need to request the instructions on how to do it and appoint a solicitor for the legal work carried out for removal of the name from the deeds.

If they do see a problem then your brother will need to understand these and let you know for further suggestions.

MarkyMarkD

The problem is that, as Robert points out, the lender's security is adversely impacted by removing one borrower from the mortgage. The lender will need to be happy to lend the money to the brother in his own stead, which will possibly be complicated by his self-employed status.

If he, as stated, will have no problem meeting the payments, I'm sure that AN Other lender will lend him the money, so a remortgage may have to come into the equation - effectively a sale from him&her to him alone with a new mortgage in just his name.

tru

Thanks everyone :T I'll print this info for him.

Ian_W wrote:

Hi troo,
You're not getting a nose bleed being so high up? :rotfl:

:rotfl:

Robert_Sterling

Come up and see us again some time Troo.