Separation agreement - remortgage

Sinistro

Hello, 
Do I need a separation agreement to do transfer of equity?
Can I do transfer of equity with no remortgage?
I must payout my partner from joint mortgage. 

Emmia

If your ex is coming off the property title and will no longer have an interest in the property, they'll also need to come off the mortgage - so you'll be the one solely responsible for paying it.

A joint mortgage makes those named "jointly and severally liable" so if you stopped paying your ex would be on the hook for the whole amount. If I was your ex, and we were separating I wouldn't agree to that. Your ex staying on the mortgage and the title and thereby retaining an interest in the property also means they'd need to pay higher rate stamp duty if/when they bought another property.

Presumably to pay them off you need to take equity out (you don't have the cash) so to do that you'll need to remortgage in your own name as a sole borrower. 

Can you afford the required repayments by yourself if the mortgage is larger? Any mortgage calculator will help you establish this.

If you can't, then either your ex needs to buy you out so the property is theirs, or the property needs to be sold.

Sinistro

Does every bank require a separation agreement for remortgaging?

What are the bank's criteria for remortgaging and equity transfer?

Emmia

Sinistro said:

Does every bank require a separation agreement for remortgaging?

What are the bank's criteria for remortgaging and equity transfer?

I think you need to ask your lender.

You're not transferring the mortgage though, one of you is coming off and the other is staying on (the bank probably doesn't care about a separation agreement). What matters is whether the person staying on can afford the mortgage - and if you're also taking equity out to pay your ex, that will affect affordability. You'll essentially be getting a new mortgage with affordability checks etc.

Are you on a fix at the moment? Are there any charges associated with ending your current deal?

Sinistro

Yes, I'm on fix now. There is some charge, but not to high.