removing someone off a joint mortgage?

MoneySpendingExpert888

basically the chances of getting another mortgage when you are already on a joint mortgage I believe is very slim, due to the fact that it shows up on both your credit files that you have a £xxx,xxx mortgage debt. So I assume its easier to get a mortgage to buy another property if you apply without an existing mortgage.


Problem I have is, that I am basically looking to buy my own property which is in a location where I often travel, the property has been offered by a close friend at a very good price for a quickish sale but at the moment I am having difficulty getting myself off an existing joint mortgage with my partner because they said that if I wanted off the joint mortgage then I would have to relinquish all ties with the existing property? i'm not allowed to live there or have any connection to it whatsoever?

any advice would be appreciated. Thanks

MoneySpendingExpert888

Oh I also understand from the lenders point of view that if they obviously have two people on it currently then its better for them as they have more collateral when it comes to chasing a debt. So I understand why they wouldn't want to let me come off the mortgage.

I am just wondering if there is any advice that anybody has come across which would help me sway their decision. Thanks

kingstreet

Make the transfer of equity and the new purchase "complete" on the same day, so you move from one property to the other, just like if you were selling and buying?

Look for mortgage with new lender which will lend you enough with the existing mortgage in-situ, subject to affordability?

MoneySpendingExpert888

kingstreet wrote: »

Make the transfer of equity and the new purchase "complete" on the same day,

Hi Kingstreet, thanks for replying to my thread, glad to have someone who seems to seems to be very well versed in this topic giving some advice.

Would you be able to elaborate on the point you made above? sorry as you can tell I am not 100% confident that I wrapped my head around that suggestion. Thanks

kingstreet

The lender is saying it's not happy for you to remain in the property after the transfer of equity is finalised.

So, delay the end of the transfer of equity until the completion of the new purchase and step from one property to the other like you would if it was a sale on completion day.

The new lender will want you off the old mortgage "on or before completion" as it would if you were moving house and that can be achieved as above.

Solicitor will supervise to lender satisfaction.

MoneySpendingExpert888

Oh right I understand what you mean. Sorry I think I just complicated it in my own mind.

The problem that I have is that I cannot purchase the property until I have gotten off the current joint mortgage because I assume if I apply for a mortgage when I have an existing one they will most likely reject it?

kingstreet

Everyone who owns a property with a mortgage who wants to move house applies for a mortgage on the basis the old one will be repaid the same time as the new one starts.

Why can't that premise be used here?

I've done it before and never had a problem...

MoneySpendingExpert888

ah right I see what you mean. In my case the old mortgage won't be paid off when the new one starts, because it will be my own house which I will pay the mortgage for and the existing mortgage will carry on with my partner paying for it. I think the only concern that they had was 1 persons affordability vs 2 peoples affordability?

Maybe I unnecessarily gave myself away to the person I spoke to on the phone because they asked me specific questions about why I wanted to take myself off the mortgage and said that if it was to buy another property then they wouldn't allow it, they might consider it if I was a case of me severing all ties with the existing property (I assume they meant if me and my partner were basically splitting up)

kingstreet

You're confusing the two issues here.

Issue One

There's a transfer of equity. This involves your partner going to the existing lender (or remortgaging to another) to get the mortgage in their sole name so you can be removed from the mortgage and the ownership of the property.

Provided the person can afford that mortgage alone, it should be fine.

Once the mortgage is resolved, the matter is passed to a solicitor for the transfer of equity to be finalised. This is the point you will be formally removed, so this is the point similar to a sale, where your obligation for the mortgage ends.

However, you will normally be unable to remain an owner of the property if you won't be party to the mortgage.

Issue Two

While the above is going on, you want to find a new property and apply for a mortgage. You would apply in the usual way, noting on the application that your commitment to the above mortgage will end "on or before completion" of the new one. This is normal.

If you remain party to the old mortgage, you may still be able to arrange a new mortgage, but you will be able to borrow less because of the existing commitment. How much less and if this will leave you enough for an onward purchase, we can't tell.

I suggest you appoint an independent broker to help with this, as you appear to need professional guidance, particularly with lender selection.

MoneySpendingExpert888

OK thanks for putting it in black and white for me.

To be honest, I wouldn't have still expected to be an owner or have any ownership of the property once my name had been taken off so I wouldn't have any quips regarding that matter.

I think the affordability of the house for my partner along might be on the borderline, based on my partners salary alone and the income/expenditure, we have been given an estimated amount which we can borrow which just about matches what is left on the mortgage.

The thing I was most confused by was that the decision whether I could or couldn't come off the mortgage seemed to have depended on my personal reasons instead of if my partner could afford to sustain this mortgage herself then let it be. But then again mine is very much the simplistic view and obviously I don't know the ins and outs of the mortgage industry.

Kingstreet, I thank you very much for the advice given