You can port your mortgage deal to another property, but is it possible to transfer your mortgage to another person? The short answer is yes — and all it costs is some transfer fees and time.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Why would you transfer your mortgage to another person?
We’ve previously covered the possibility of transferring your current mortgage deal to another property – porting your mortgage. However, there are a number of reasons why you might want to transfer a mortgage to another person. Perhaps you want to move it to a family member or pass it down to your children.
Mainly, people add or remove individuals from their mortgage because they want to change from a single to a joint mortgage (or vice versa) or to simply remove a borrower.
The process can be quite complicated and it’s not very common, but it is possible.
The process of transferring your mortgage to others
The first step in the process is to contact your lender to find out exactly what transferring a mortgage entails.
If you want to keep your house ownership situation the same but change the details of the borrowers on the property ownership, this is called ‘Transfer of Equity’ and the process will differ based on individual circumstances. In this case you would be adding your children onto the mortgage and transferring it from a single to joint mortgage.
Moving your entire mortgage to another party is a different process because it will remove you as the owner of the property. Essentially, it’s like a sale or purchase. Examples of this would be transferring your mortgage to your children or another family member.
Common cases
Most commonly, transferring a mortgage occurs during the dissolution of a relationship or conversely, a relationship moving to the next level.
In the event of a breakup, one of you might choose to buy your ex-partner out of the joint mortgage. Legally, you are both responsible for the mortgage payments so if you want to take sole ownership of the management of that task, you’ll not only need to have the funds to buy out their share, but you’ll need to prove you can afford to do take it on yourself with only your income.
During the process, lenders will need to carry out affordability and credit checks on top of the fees associated with the transfer. Many people use buying out a mortgage from a partner as an opportunity to review their mortgage and many jump at the chance of refinancing.
If you wish to add a partner onto your mortgage, they’ll be the one subject to the usual income and credit checks – plus they could be liable for a stamp duty charge.
What is you are self-employed?
Even if you are a contractor or self-employed, there are lenders that have options. One option is to retain ownership of the property and let it out to tenants using a Buy-to-let mortgage. Affordability for these kinds of mortgages is based on potential rental income and not an individual’s earning capacity.
Seek professional advice
Regardless of whether you’re trying to add or remove someone from a mortgage, it’s always advisable to see professional advice so all parties know exactly what to expect. Speak to a mortgage adviser to ensure you’re making the right decision for you.
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