Switching mortgage from joint to sole

RayK1979

Hi

Just looking some advice

I currently have a joint mortgage with a partner. They own other property and are verging on bankruptcy. I have been speaking with my bank about taking sole ownership of the mortage (I am more than capable of meeting the payments on my own) but they say I need to get a new mortgage, and they only offer ones with large deposits.

My questions (and I hope you can help) are:

1.) Is it possible to take full responsibility for a mortgage if one partner goes bankrupt? Without being required to take out a new mortgage.

2.) Will this effect my credit rating?

Many thanks for any help offered

Ray

Meeper

It is entirely in the hands of the lender to determine whether you meet their criteria on your own. If you do not meet their criteria on your own then they will not let the second named person be removed. Your only option in this case would be to get a different mortgage elsewhere.

Your credit rating may well be affected by the principle of "associated adverse". On any application you would need to state your partner's name as being resident in the property with you, and his/her adverse credit may impact on the approval of the mortgage as it would give a bad picture of the overall financial stability of the property.

I wonder - why do you need to remove your partner's name from the mortgage? It is running and you can afford the repayments, why not just leave well enough alone and don't disturb the hornet's nest?

Thrugelmir

RayK1979 wrote: »

1.) Is it possible to take full responsibility for a mortgage if one partner goes bankrupt? Without being required to take out a new mortgage.

Your partners share of the equity in the property is an asset.

There's more to this than merely taking over the existing mortgage.

getmore4less

If they go bankrupt the OR will probably see through this.

How much is the house worth how big is the mortgage?

How do you own the house joint or common?

The OR will let you buy the share how much will depend on the equity.

There are a few other gotchas so you will need advice on this.

Radiantsoul

If there is any equity in the property this could be a transaction at undervalue and would be unwise as the trustee would seek to unwind the transaction.

Your best option is probably to wait until your partner is bankrupt and then make an offer for their beneficial interest. There name would still be on the mortgage, and the mortgage company would carry on as before. As your partner has other assets a trustee in bankrupt(an accountant) will be appointed and they will seek to realise all the assets. To buy the beneficial interest you will need to pay a sum that will be a proportion the equity plus any of the trustees out of pocket costs. A solicitor might be advisable.