Equity buy out due to split - Can the mortgage stay in joint names to avoid new loan?

dentalrecords

Hello,

Searched quite a bit on this but don't seem to be able to find an exact match to my question. Forgive me if it's an obvious answer.

Myself and my partner are joint tenants, and both on the mortgage. We need to split so I will potentially buy her out of her share of the equity.

I understand we will need to employ the services of a solicitor for the conveyancing, effectively I am buying the house of the pair of us. However, and this is my question, can the mortgage stay the same in the short term?

The reason for wanting to do this is to avoid having to re mortgage now.. I'd prefer to get the split done, move the money around, sign the relevant paper work etc and the look at that a little later.

I understand that if I were to default, she would also be liable and may not want to go ahead on that basis alone, so we'll assume that she is accepting. I don't intend to default.

So I guess I need to know whether the lender (First Direct) would be happy to continue with a joint mortgage on a property that had moved from joint to single tenant ownership and even if it is legally possible? Also, what legal implications are there in terms of making sure the paperwork we both sign during the buy out means she has no further claim on the property, despite there being a period of time where she was still named?

Thanks in advance for any information.

Steve

DandelionPatrol

Won't work. The charge held by the lender prevents the Land Registry changing the ownership without the consent of the lender.

Sam_41

I'm in a similar situation and have spoken to both the land registry and my lender tonight. The land registry explicitly stated I need the consent of the lender. Having called the lender (Accord), they said I couldn't change the title deeds without changing the mortgage, through a transfer of equity, which would cost £160. Without this, they would not give consent.

It's frustrating as the 5 year fix runs out at the end of October and I will be moving to a different lender anyway, so it seems a waste to pay £160 now when I'm moving away from them in just over a month.

I was wondering if I left the title deeds as is now, with the intention of transferring as I switched mortgage provider, but would it not put a mortgage application in doubt if they saw two names on the title deeds? And could I specify the deeds to change on the same day as I remortgage?

The other name on the deeds is my brother, so there is no rush either way for him to come off the deeds or the mortgage, as long as it's done for when I remortgage the property.

Thrugelmir

dentalrecords wrote: »

I understand that if I were to default, she would also be liable and may not want to go ahead on that basis alone, so we'll assume that she is accepting. I don't intend to default.

Assume that she won't be willing. Not only is she liable but it gives her no ability to move on herself with her life. The umbilical cord needs to be cut.

dentalrecords

Brilliant, thanks everyone for clearing that up for me... no more time wasted on that avenue!

Good advice Thrugelmir...

Land_Registry

Sam_41 wrote: »

I was wondering if I left the title deeds as is now, with the intention of transferring as I switched mortgage provider, but would it not put a mortgage application in doubt if they saw two names on the title deeds? And could I specify the deeds to change on the same day as I remortgage?

The other name on the deeds is my brother, so there is no rush either way for him to come off the deeds or the mortgage, as long as it's done for when I remortgage the property.

When you go for your new mortgage they will presumably assess your in the normal way re ability to pay and value of property etc
They will check the registered title and then be aware of the joint ownership but as you suggest if you clarify that it is to be transferred by the two of you to just you then they will presumably just need that confirmed by you both and written into the terms and conditions.

They will insist on your using a solicitor to complete the process so they would submit the Transfer and new mortgage for registration.

Sam_41

Would that be as part of the legal fees usually incurred with a remortgage or extra fees on top specifically for the transfer?

I'm just thinking in that case if I'm liable to pay fees anyway, then I might as well just pay the £160 now to my existing lender and get the ball rolling with it.

Land_Registry

The legal fees and registration fees are separate so it would be 'on top'

From a registration perspective you pay a fee to register the Transfer and a fee to register the charge if they are two separate applications. If you register the Transfer and new charge at the same time you only pay the registration fee for the Transfer.