Adding name to title of property

magan

My sister & her husband have owned a property for around 10 years, but when they bought it, as they were not married yet, they only got it in her husband's name. Now after years of marriage they want to add her name to the title. They have contacted the mortgage lender to add her name to the mortgage ( the payment will come from the same bank account, there is no change at all paperwise, only her name added) but it seems that the lender is trying to fill a new application for mortgage, (which they are not interested in as they have a really good deal already).

I have the idea that they shouldn't even have anything to do with the mortgage if what they want is just to add the name to the title of the property they should just have to add it to the land registry. I understand that one thing is the title of the property (which proves ownership) and the mortgage lender that pays for the house (she wouldn't be paying as she is not working at the moment). Am I right? Can they add her name to the land registry and leave the mortgage payments only on her husband's name?

Goldiegirl

The lender generally will require that the property and the mortgage are held in the same name.

Therefore if the name that the property is held in is to be changed, they'll need to apply to the lender for a consent to a Transfer of Equity.

The new borrower will have to be underwritten - as the mortgage is already being paid by the existing borrower, this should be simple - probably she'll just need to provide proof of ID and address, and they'll do a credit search on her, and assuming she passes that, the lender will issue a letter of consent. A copy will also be sent to the solicitor who is acting. The solicitor deals with the transfer of the title, reports back to the lender, who will then transfer the mortgage into the new joint names.

In theory, they could just go ahead and add the wife's name at the land registry...... But then they'd be in breach of the mortgage conditions, and a whole world of hurt, as in theory the property could be repossessed!

They need to go back to the lender, and ask for a Transfer of Equity application.

If the lender won't agree, then they'd need to wait until the end of the deal, and remortgage in joint names elsewhere

Thrugelmir

Any change to the land registry would require the permission of the lender.

To become party to the mortgage then a full application needs to be made. As the lender needs to vet any new party.

Has the issue of the existing mortgage product been discussed with the lender?

kingstreet

magan wrote: »

I have the idea that they shouldn't even have anything to do with the mortgage

Nope. How can someone become joint owner of a property without becoming jointly responsible for any debt already secured on it?

Imagine trying to enforce the mortgage deed against someone not party to the mortgage in the first place.

They can't? Good point.

So, the lender vets the new applicant and they become a borrower and an owner at the same time, through a process know as a transfer of equity, which may involve the new party paying stamp duty if the "consideration" is enough.

To avoid this, the current owner can repay the existing mortgage, then the process requires no lender's agreement/approval.

magan

Thank you so much to everyone that has taken the time to reply. I have been having a look around regarding the "transfer of equity application" but I don't seem to find specific information.. Would this application involve actually applying for a new mortgage for both of them?? They have an amazing deal from 10 years ago and they are paying a silly amount of interest, definitely any new deal will completely kill all those benefits and the interest will multiply like crazy.
Anyone knows if there are any additional costs? I am trying to figure out the easiest way for them to sort it out. They should have sort it out ages ago and now, with my sister looking after the family and not working it doesn't seem to make things better (from a "new-mortgage-application" point of view).

Goldiegirl

I can only speak about the Halifax, which was where I used to work.

In this situation, there was no need to apply for a new mortgage - the existing mortgage is transferred to the new names.

The Halifax's fee was £160 (I haven't heard that it's changed)

Then there's the solicitors fees, I think typically around £300 - £500.

Hope this is of some help

magan

Thank you, it is good to have a clue about how much money could be involved, roughly. Their lender has been taken by a bigger company some years back and their mortgage conditions haven't changed so I hope they don't use the "transfer of equity application" to change the conditions to their mortgage now. That is their main fear, that somehow they get there not fully informed and they find themselves tied up into a complete different setting of conditions.
So I would assume that the change of name would involve a expenditure of around £700 to sort out the side of the lender without affecting the existing mortgage. And they will have the extra amount required by the land registry to add the name to the existing deed (+ solicitor's fees to do this).

ethank

I think times have changed now. Lenders are required to assess transfer of equity including a new customer as if they were a new customer. They need to be responsible and ensure that the person can afford it and is likely to repay it.

magan

There is nothing to afford or not. Payment is coming from the same account and it is exactly the same person paying, mi sister doesn't work. It is just a question of adding a name. Payment on time has NEVER failed, there is no change on circumstances in the account they have been collecting the payment from, so that should not present a problem at all.

ethank

My point is that it is not as simple as just adding a name.

The mortgage lender has to act in a responsible way, and they will conduct checks just as they would for any new customer.

Thrugelmir

magan wrote: »

It is just a question of adding a name.

Not in the view of the lender.