Can You Add Someone To A Mortgage? UK
Yes. Can you add someone to a mortgage? The answer is positive, whether with your current provider or when switching to a new mortgage provider.
How Do I Add Someone To A Mortgage?
Adding someone to your mortgage involves more than simply updating names with your lender.
You’ll need to submit specific forms for the lender to evaluate the new person’s credentials thoroughly.
The formal procedure of adding someone to a mortgage is known as equity transfer, which can be accomplished through two primary methods:
Adding Someone To Your Current Mortgage
When adding someone to your existing mortgage, you’ll need to contact your current lender to initiate the process.
The lender will conduct a process similar to a new application, where the person being added must undergo standard financial assessments and credit checks before approval.
The additional person will share equal responsibility for mortgage payments, and the lender must verify their ability to meet these obligations.
If they satisfy the lender’s requirements, approval is often straightforward, as having two individuals on the mortgage typically provides better security than one.
However, your existing lender reserves the right to decline adding another person if they fail to meet the criteria, regardless of your excellent payment history.
Legal assistance may be required to add the new name to the property’s title deed, and the lender might charge an administrative fee for processing.
Remortgaging To A Joint Mortgage
Alternatively, you could opt for remortgaging, which involves securing a new mortgage agreement with either your current lender or a different provider.
The remortgaging process requires applying for a new joint mortgage with the person you wish to include.
This involves a complete new mortgage application, including property assessment, income verification, and comprehensive affordability checks.
Speaking with a mortgage adviser who has access to the whole market before remortgaging can help secure the most suitable deal for your situation.
They can evaluate various lenders and mortgage products while assisting with your application, making the process more efficient.
Which Is The Best Way To Add Someone To A Mortgage?
The choice between remortgaging or adding someone to your current agreement depends on several factors.
A crucial consideration is whether your current mortgage includes early repayment charges (ERCs).
If you’re within a fixed-term or promotional period with your lender, breaking the agreement early could result in substantial ERCs, potentially costing thousands of pounds.
If these charges make remortgaging with a new lender financially unfeasible, adding the person to your existing mortgage through an equity transfer might be more practical.
However, if you’re not bound by a fixed term, remortgaging could be the more advantageous option.
Remortgaging presents the opportunity to explore various deals from different lenders, potentially securing more favourable interest rates that could lead to substantial savings over time.
Considerations When Adding Someone To A Mortgage
Adding someone to a mortgage is a significant financial decision that requires careful consideration of several crucial factors.
These important aspects include:
The Relationship Status
For those in a civil partnership or marriage, adding your partner to the mortgage isn’t strictly necessary.
In marriages, the ownership status of the property isn’t determined by whose name appears on the documents, as both parties maintain legal claims.
Should one spouse pass away, the property automatically transfers to the surviving partner.
However, if you’re unmarried but wish to share property ownership with your partner, adding them to your mortgage becomes necessary.
It’s particularly important to safeguard your investment if you purchased the property independently before the relationship and have accumulated substantial equity over time.
Given that circumstances can evolve unexpectedly, you might feel uncomfortable about your partner receiving half of your hard-earned equity following a potential separation.
One solution is to add your partner to the mortgage while protecting your equity through a tenants in common arrangement.
This approach enables you to specify each person’s property share from the beginning, rather than defaulting to an equal 50/50 split as typically occurs with joint mortgages.
Legal Work
Seeking legal counsel is crucial before proceeding with adding someone to your title deeds and mortgage.
Various implications need consideration, including taxation, inheritance matters, and contingency plans for potential separation.
A solicitor’s expertise is essential for managing all legal aspects.
They’ll need to obtain title documentation from the Land Registry, add the new name to the property deeds, and create a transfer deed requiring signatures from both parties in the presence of a witness.
They can also assist in preparing documents to protect your equity if you’re unmarried.
This might include establishing a deed of trust outlining ownership shares or drafting a cohabitation agreement covering property and financial arrangements during cohabitation or in events of separation, death, or illness.
Credit Association
When establishing a joint mortgage, your partner’s credit rating becomes linked with yours, meaning their financial history appears on your credit report.
While this mightn’t cause concern if they maintain a good credit score, linking your credit to someone with poor credit history could be problematic.
Such an association could negatively impact your creditworthiness and complicate future borrowing or remortgaging opportunities.
Mortgageable offers a free Equifax Credit Report as part of its service, with no obligation to proceed. Something worth considering.
Can You Add Someone To A Mortgage? Final Thoughts
If you’re contemplating adding someone to your mortgage, begin by consulting a solicitor for professional legal guidance.
They’ll provide essential guidance on protecting yourself and any children involved in the arrangement.
Before deciding whether to add someone to a mortgage or pursue a joint remortgage, carefully review your existing agreement for early repayment charges and associated costs.
For personalised advice on all available options, reach out to our experienced team today on 03330 90 60 30 or contact us. Our mortgage specialists are ready to assist you.
