Remortgaging to a joint mortgage

withaspritz

Hi all

Bought my house 3 years ago (a mortgage in my name only). Affordability was tight, the shortest term I was offered at the time by the broker was 35 years with my deposit amount (15%). This was in between lockdowns 1 and 2.  At the time I had a large car finance payment which I don’t have anymore, but my salary hasn’t really changed since - not kept up with inflation anyway!

Earlier this year I married my long term partner.   He earns about 50% of what I do.  We’ve been happily together a decade or so. He’s contributed (a modest sum - salary ratio - see question 4 below!) towards the mortgage since he moved in to my previous property which was sold to move into this one.

I want to put him on the mortgage when my 5 year fix expires in 2025 - I was (and probably still am) just tight on affordability for a shorter term, which is what I would like to go for. 

A few questions I was wondering if the forum could offer thoughts on:

1. Is it just a straightforward case of remortgaging to a joint mortgage with my husband at that point?  
2. Does it make a difference to any of this if we go Tenants in Common vs Joint Tenants? *
3. Are there any tax or stamp duty considerations to adding a name to the mortgage?
4. We pay all our bills, incl the current mortgage in my name only, from a joint account, which we both pay into based on a ratio of our salaries (which is about 33:67).  If I don’t add him to the mortgage at a remortgage, will this be an issue in calculating my (solo) affordability?

Thanks in advance!

* I was thinking of going joint tenants rather than T-I-C, as we are married, and he’s contributed heavily to the joint bills over the time we’ve been together.  The 15% deposit came from the sale of my previous property, but the house itself has increased in value over the last 3 years by more than double the deposit amount, and I’d want to share this gain with him as he has helped pay the monthly bills and is a general financial rock

Also worth noting, we both have decent credit ratings, in the 900s on clear score for example.

kingstreet

1. Mortgage-wise, yes. Just a joint application. Legals-wise, no. A transfer of equity (TOE) will be needed at your expense.
2. Nope. Not a mortgage issue. Tell solicitor who handles remortgage and TOE what you want.
3. Possible SDLT depending on amounts concerned - typically based on 50% of value of mortgage being "transferred."
4. No. Affordability is based on gross income.

withaspritz

kingstreet said:

1. Mortgage-wise, yes. Just a joint application. Legals-wise, no. A transfer of equity (TOE) will be needed at your expense.
2. Nope. Not a mortgage issue. Tell solicitor who handles remortgage and TOE what you want.
3. Possible SDLT depending on amounts concerned - typically based on 50% of value of mortgage being "transferred."
4. No. Affordability is based on gross income.

Thanks for the concise reply! 

Much appreciated!

On point 3: my husband has never owned a property before. Would he still qualify as a first time buyer in this instance for SDLT? 

Newbie_John

Just to bring slightly different points of view:

1. As you are married and he contributed to mortgage - he already "owns some" of the property.
2. If you don't remortgage, but do a product transfer (pick another fixed term with your existing mortgage provider) then no affordability is needed, it stays as it was.
3. Shortening term - you can achieve this by doing overpayments - so no need to remortgage just so the period is shorter. If you overpay and reduce the term - your mortgage simply gets shorter and cheaper at the pace you can afford. 

withaspritz

Newbie_John said:

Just to bring slightly different points of view:

1. As you are married and he contributed to mortgage - he already "owns some" of the property.
2. If you don't remortgage, but do a product transfer (pick another fixed term with your existing mortgage provider) then no affordability is needed, it stays as it was.
3. Shortening term - you can achieve this by doing overpayments - so no need to remortgage just so the period is shorter. If you overpay and reduce the term - your mortgage simply gets shorter and cheaper at the pace you can afford. 

Exactly this, why I would probably go Joint Tenants so share the house 50:50 that way.  

My mortgage provider is Accord who cannot allocate overpayments to shortening the term, I had this argument over the phone with them several times. Overpayments will only ever reduce the regular DD upon annual review.  Shortening the term requires a re-proposition and a new mortgage deal. 

Newbie_John

Can you pay off mortgage in full when your fixed deal ends?

If so, open joint saving account paying 5%, keep paying in there what you would have paid towards mortgage.

Based on random example, if you have 20 years left of mortgage - keep fixing for 5 years (3 times), keep saving for 15 years and when you save enough - you can pay the entire mortgage 5 years earlier - with most provider when you move to non-fixed standard rate you can do unlimited overpayment.

It almost works the same way.

Even if you overpay and reduce monthly payments - you'll get yourself to a place where the cost of the mortgage will be so small in the future - almost like not having mortgage.

withaspritz

Newbie_John said:

Can you pay off mortgage in full when your fixed deal ends?

If so, open joint saving account paying 5%, keep paying in there what you would have paid towards mortgage.

Based on random example, if you have 20 years left of mortgage - keep fixing for 5 years (3 times), keep saving for 15 years and when you save enough - you can pay the entire mortgage 5 years earlier - with most provider when you move to non-fixed standard rate you can do unlimited overpayment.

It almost works the same way.

Even if you overpay and reduce monthly payments - you'll get yourself to a place where the cost of the mortgage will be so small in the future - almost like not having mortgage.

That’s a good point, thank you