Removing name from joint mortgage

kenwaard

Hi All,

New to this site so apologies if this question has been asked elsewhere - I am hoping the answer is quite simple...

I have a joint mortgage with my girlfriend (1 year into a 5 year fixed mortgage). She wants to pay off her half of the mortgage after coming into some money which is great (understand their are penalty fees for this).

My question(s) are;

- Can we remove her name from the mortgage after making this payment as her financial responsibilities are complete?

- If so could I keep the existing mortgage deal and maintain payments at the current rate or would the monthly payments decrease?

Thanks in advance for all advice,

Sparx

Someone will come along and confirm in concrete, but just because you have a mortgage it doesn't mean you are both liable to pay 50% of the mortgage.

You are both liable to pay 100% of the mortgage. If you have a 100k mortgage, you both don't owe the bank 50k each, you both are responsible to pay back the bank the 100k + interest accrued.

You can make overpayments, usually 10-20% without penalty. Maybe you should look into doing this initially? Then maybe look to spend, save or invest the remainder else where to keep up with the overpayments?

kenwaard

Thanks Sparx, we have a signed cohabitation agreement and declaration of trust drawn up showing who is liable for what costs and associated house ownership %'s so effectively we have agreed to be liable for 50% though of course as you say the bank just wants 100% + interest back regardless of who pays it.

We are agreed between us and now just need to know if its possible as per my questions. I did visit the bank today but slightly worringly their representative wasnt too sure!

TrickyDicky101

Most banks insist all named on the deeds (land registry) must be a party to the mortgage, so this would seem to prevent your plan.

kenwaard

Thanks TrickyDicky - the bank certainly didnt mention that (spoken to 2 different people now) but if it is true then yes it would be a showstopper. Interested in other peoples thoughts!

Cheers,

Sparx

kenwaard wrote: »

We are agreed between us and now just need to know if its possible as per my questions. I did visit the bank today but slightly worringly their representative wasnt too sure!

Who is your mortgage with?

You might not get a definitive answer then in your scenario without speaking directly with your bank. Maybe call them? The call centre staff may be a little more clued up or you may speak to someone more senior.

kenwaard

I have an appointment with HSBC this coming week so will see what they say then. I did have a brief chat with this mortgage 'expert' on the phone today and he didnt seem sure to say the least!

getmore4less

Does this delclaration cover massive overpayments to the mortgage?

in not, woops,, what else have you missed?

Anyway
They won't do it(99.9% sure), take you off the mortgage and you still both own the property(stay on the deeds).

You could get the trust redrawn that you are responsible for the full mortgage(after 1/2 the ballance has been paid) so when sold you get 1/2 each and you pay the mortgage out of your 1/2.

She could lend you 1/2 the money and you pay her back overtime.

You could stick to the agreement you have.

...


if you do decide to go ahead there ways to optimise the overpayment so you pay the smallest penalty, depends on your overpayment conditions exactly how you do this.

kenwaard

Thanks.. our agreement is in %'s rather than £ amounts so any overpayments wil not affect equity amounts etc so pretty comfortable on that. Sounds like it comes down to one question which it sounds like I now know the answer to. Can we remove a name from the mortgage whilst keeping on the house deeds?

No great drama if not.

Simon_gloster

No, people on the mortgage paperwork have to be on the deeds.

People can go to court at lengthy cost to get a court to order who owns a property, however a lender will only allow this primarily through marital splits or borrowers who are no longer contactable.

alexanderalexander

kenwaard wrote: »

I have a joint mortgage with my girlfriend (1 year into a 5 year fixed mortgage). She wants to pay off her half of the mortgage after coming into some money which is great (understand their are penalty fees for this).

I realise that I am not answering the question you asked, but it's interesting that people who have mortgages often fall into the trap of thinking that the only sensible thing to do with any windfall they receive is to pay off as much of their mortgage as they can. Have you and your girlfriend considered the option of not using the money she's come into to pay off her half of the mortgage? Instead, she could carry on paying her half of the ordinary repayments exactly as she was before, and then use her windfall for some other type of investment (perhaps getting a buy to let if that's the sort of thing she'd be interested in and willing to manage, or the stock market).

This would have three advantages: (i) no early repayment fees on the mortgage; (ii) no need to worry about the tricky-looking legal and practical issues discussed above; and (iii) your girlfriend would most likely make more money investing the money elsewhere, especially given that the mortgage rate you are on is probably quite attractive (given you got your mortgage a year ago). This last one is probably the biggest advantage.

Buy to let or shares are of course both long-term investments, but as your girlfriend would be happy to put the money into your current property she clearly isn't too concerned about keeping the money in liquid form over the next few years.

Apologies again for not really answering your question, but hope this idea is at least of some interest to you.