Unfortunately, it happens. Sometimes you think you’ve got it all worked out with your marriage or relationship, you buy a property together, and then you don’t get the fairytale ending you were hoping for. It happens to the best of us, and getting things in order when it doesn’t work out can be messy or feel like a never-ending task. In this situation, one thing you might need to think about is taking your former partner’s name off your mortgage. In this blog post, we look at can a co-signer be removed from a mortgage.
The end of a relationship isn’t the only time that something like this might crop up. There are other circumstances apart from a relationship breakdown when you might also want to remove the other person’s name from your mortgage. In some cases, your parents or another close family member might have co-signed your mortgage whilst acting in the capacity of a guarantor. Over time, your financial circumstances might have changed and you might be in a position to take on the mortgage completely on your own, and therefore wish to remove your co-signer.
If a relationship has ended, or you wish to end a joint or co-signed mortgage for any other reason, there are a number of different options available to you. One is to sell the property. This means you won’t be financially tied to each other, but you’ll both need to find somewhere new to live. Another option is to rent the property out if neither of you wants to give it up but you don’t want to live there either. If things are amicable, this might be an option worth considering – bear in mind that the rental income will need to be shared between both owners.
Of course, there might be times when the best thing is to cut ties altogether. Alternatively, one person might be happy to voluntarily move out of the property and give up their stake in it. If one of you wishes to stay living in the property and you can manage to agree on who that’s going to be, one of the most common ways to resolve things is to have that party buy the other out and then have the mortgage moved solely into their name. This is generally known as equity transfer and is a legal process.
In this case, equity refers to how much of the property you actually own, or the amount you’ve repaid on the mortgage. Depending on the circumstances, equity transfer when you’re removing one person from the mortgage might mean you need to obtain a new mortgage that’s only in one person’s name. Your mortgage lender will be able to give you accurate advice about your specific case. Whatever your reason for wanting to remove a co-signer from your mortgage, it’s wise to speak to your lender as soon as possible to discuss your options and get the ball rolling.
If you want to remove a co-signer’s name and be the sole person named on your mortgage, the first step is to have a word with your lender. You need their consent to transfer the mortgage, and it’s likely they’ll want to have an interview with you to get to grips with your circumstances. Your lender will assess your request – the person who wants to retain the mortgage will need to prove that they can keep up with the repayments on their own. You might also need to have the property revalued.
If your mortgage provider is satisfied that the new circumstances meet their lending requirements then they’ll issue a consent to transfer instruction to your solicitor. This sets out the lender’s legal requirements for the transfer to take place. The solicitor would then arrange for a Transfer Deed, which will need to be signed by both parties.
Once completed, this means that one co-signer will no longer be included on the mortgage or on the property’s legal title. The fees for this kind of service vary depending on the individual circumstances, but they’ll be in the region of £300 plus £60 VAT. Additional searches and Land Registry fees might also add to the cost. The area of the country that you live in, as well as the complexity of the circumstances, can also impact the cost of the service. You might also need to pay Stamp Duty if you’re making a significant payment to buy out the other owner.
No matter what your circumstances are or your reasons for asking can a co-signer be removed from a mortgage, the important thing is to always seek the right advice from both your mortgage lender and a solicitor. A big change in circumstances, be it a relationship breakdown or something else, is always a lot to deal with. Getting reliable advice from professionals is the best way to make sure things are dealt with smoothly and correctly so that everyone can happily move forward.
Mortgages don’t have to be something scary. At Mortgage Mentor, we know that the M word strikes fear into the hearts of many, and that’s why we’re here to help. We’re an innovative new mortgage brokerage and we want to make buying a house and getting a mortgage for the first time simple. Mortgage Mentor will support you every step of the way with free advice, zero fees, and lots of expert guidance throughout the whole process. Get in touch to find out more about how we can support you on your quest towards homeownership.
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