Can I be added to another mortgage?

Limeskies345

Tricky situation….

My brother is currently going through a divorce, they bought a new build house last year. He pays all bills and mortgages.

Ideally would like to keep the house as, secured good interest rate for 10yr fixed and also valuations are averaging £57k below paid! the plan would be to port mortgage in a few years once value increases in house.

Ideally, he would like to settle in divorce. However taking his ex off the mortgage will reduce his affordability rate.

I live in my own house with a mortgage. Is it possible to add my name to my brother mortgage? How would it impact my finances? 

Rob_Doe

Limeskies345 said:

Tricky situation….

My brother is currently going through a divorce, they bought a new build house last year. He pays all bills and mortgages.

Ideally would like to keep the house as, secured good interest rate for 10yr fixed and also valuations are averaging £57k below paid! the plan would be to port mortgage in a few years once value increases in house.

Ideally, he would like to settle in divorce. However taking his ex off the mortgage will reduce his affordability rate.

I live in my own house with a mortgage. Is it possible to add my name to my brother mortgage? How would it impact my finances? 

i'm in similar shoes here, trying to keep "dream" house as partner (named on mortgage) walked away and thru last 10yrs I was paying all bills and mortgage, its nightmare to change things with mortgage now with current interests charges,

jimjames

Limeskies345 said:

I live in my own house with a mortgage. Is it possible to add my name to my brother mortgage? How would it impact my finances? 

You'd be taking on responsibility for negative equity and all the impact that could have on your finances. If you do have enough headroom on income to do it, it will then affect your options later on if you need to move. What happens if negative equity remains for 10 years? People generally have forgotten the impact of that as we've had rising prices for so long but our house was worth less than was paid 10 years afterwards when we had to sell, it only exceeded that some 15 years after we'd bought it.

MWT

Limeskies345 said:

Ideally would like to keep the house as, secured good interest rate for 10yr fixed and also valuations are averaging £57k below paid!

Does that put him into negative equity, or is the house still worth more than the outstanding mortgage, even at the lower current valuation?

The answer goes to the level of risk you are assuming...

Also how about your situation, the mortgage you already have will considerably reduce the amount of help having you on his mortgage would actually provide...

If you have a very low mortgage and a high salary then you would be helpful, but if your salary and any other debt only just justifies the mortgage you currently have then you will not help him at all...

You are of course also making yourself liable for the whole of his mortgage if something went wrong and he was unable or unwilling to pay it himself for whatever reason...

Also you are probably giving up the possibility of getting a larger mortgage yourself in the future as long as you are on his mortgage...

penners324

There might be higher rate Stamp Duty to pay as well.

Limeskies345

MWT said:

Limeskies345 said:

Ideally would like to keep the house as, secured good interest rate for 10yr fixed and also valuations are averaging £57k below paid!

Does that put him into negative equity, or is the house still worth more than the outstanding mortgage, even at the lower current valuation?

The answer goes to the level of risk you are assuming...

Also how about your situation, the mortgage you already have will considerably reduce the amount of help having you on his mortgage would actually provide...

If you have a very low mortgage and a high salary then you would be helpful, but if your salary and any other debt only just justifies the mortgage you currently have then you will not help him at all...

You are of course also making yourself liable for the whole of his mortgage if something went wrong and he was unable or unwilling to pay it himself for whatever reason...

Also you are probably giving up the possibility of getting a larger mortgage yourself in the future as long as you are on his mortgage...

Thank you…a lot to think about. It doesn’t put him in negative equity, as the house is still worth more than the outstanding mortgage. (Even at the current valuation) 

Purchased at £375k, mortgage £215k, valuation £325k 

I’m in a comfortable position, as my mortgage is low and income high and set to be mortgage free in 4 years.

No19v87

One of the mortgage advisors may be better placed here but if you remove the ex from the mortgage, is it even possible to add someone new without it being a new application (or re-mortgage) and therefore attracting one of the new (higher) rates?

TheJP

You will have to pay SDLT and the additional 3% on the value of the house. You would likely depending on criteria need to make a new mortgage application which means loosing the current rate and paying any ERC.

silvercar

penners324 said:

There might be higher rate Stamp Duty to pay as well.

TheJP said:

You will have to pay SDLT and the additional 3% on the value of the house. You would likely depending on criteria need to make a new mortgage application which means loosing the current rate and paying any ERC.

OP is asking about going on the mortgage, not assuming any property ownership. There are some lenders that allow '2 borrowers, 1 owner' type mortgages which would allow this. 

In this case OP would be looking to be added to the mortgage and ex's name removed from the property + mortgage, leaving the situation as a '2 borrowers, 1 owner' one.

TheJP

silvercar said:

penners324 said:

There might be higher rate Stamp Duty to pay as well.

TheJP said:

You will have to pay SDLT and the additional 3% on the value of the house. You would likely depending on criteria need to make a new mortgage application which means loosing the current rate and paying any ERC.

OP is asking about going on the mortgage, not assuming any property ownership. There are some lenders that allow '2 borrowers, 1 owner' type mortgages which would allow this. 

In this case OP would be looking to be added to the mortgage and ex's name removed from the property + mortgage, leaving the situation as a '2 borrowers, 1 owner' one.

In any case it means refinancing the mortgage and losing the current deal. The brother would need to be checked etc like anyone else applying for a mortgage. So defeats the point around securing the 10 year deal. OP any update?