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According to a 2023 article in The Independent, in 2015, most mortgages in the UK were in just one name.
Nowadays, in 2023, the statistics show us that two-thirds of first-time buyer mortgages are in joint names.
How things have changed! But just as things have changed to push people into applying for joint mortgages, things can change again, giving homeowners viable reasons to want to get out of the shared contract.
Split-ups, divorce, and going separate ways happen for married couples, long-term partnerships, siblings, and friends.
The most important thing is knowing how you’ll remove someone from a shared mortgage when that happens and what it will cost you!
Top reasons for wanting to remove someone from a UK mortgage include:
- Separating or getting divorced
- Removing an investor
- Buyout
How to Remove Someone from a Joint Mortgage UK
Removing someone from a UK mortgage is a two-part process.
The Legal Part
The legal part of removing someone from a joint mortgage in the UK can be simple if everyone agrees.
If all parties agree, you must hire a professional conveyancing solicitor to ensure all the legal aspects of the process are correctly managed.
Once you’ve got a conveyancing solicitor in your employ, there isn’t much for you to do except provide them with the paperwork and information they request.
At the start of the process, you’ll receive paperwork from the solicitor, which you must complete and return to them.
The cost is usually between £100 and £200, which is the average cost of remortgage processing.
That’s easy.
But there are times when it’s not easy. Sometimes, one party wants to be removed from a joint mortgage, and the other party doesn’t agree.
Or one party wants another to be removed, and they refuse. That’s when things can become a little tricky. If all parties don’t agree, you could face time-consuming complications.
If you cannot come to a compromise with the other party, such as settling on a buyout amount or specific terms, you could go the route of legal challenge.
If you’re trying to save on costs and hassles, it’s safe to say that you’ll find this route stressful, time-consuming, and expensive.
Most people choose the legal route as a last resort if all parties seriously cannot agree.
The Mortgage Process Part
Removing a person’s name from a joint UK mortgage is similar to remortgaging.
Before you start the process, take the time to scrutinise your existing mortgage to determine if it’s still the best deal for you.
Sometimes, there are better deals with other lenders, and switching makes financial sense.
Of course, if switching is going to add fees that push the cost of your overall mortgage higher than your existing one, you will want to avoid that.
Because removing someone’s name from a mortgage requires a new mortgage application, it makes sense to shop around for potential deals that might outshine your existing one.
The requirements to remove a name from the mortgage and keep it under one name throw the remaining party into the spotlight.
The lender must assess your ability to afford the mortgage independently, which can be tricky for some people.
What Lenders Want to Know When You Apply
- What your credit score is
- What your income is (affordability)
Supporting Documents to Accompany Your Application
When removing someone from a joint UK mortgage, you’ll need to provide documents that prove you’re eligible for a new mortgage with just your name on it.
You will need to provide the following documents to support your application:
- 3 months of bank statements
- 3 months of payslips
- Proof of address (utility bills)
- Latest P60 tax form
- Proof of ID (driver’s license or passport)
If you are self-employed, you may need to provide financial documents for 6 months instead of just 3.
You can prove your income with a letter from your accountant or your latest tax returns.
Once the lender receives your application and supporting documents, they will review your application.
If you are switching lenders, the new lender may require you to re-evaluate the property, and a new credit check will be run.
Must I Buy Someone Out to Remove Them from Our Joint Mortgage?
The short answer is no. You don’t have to buy someone out to remove them from the mortgage.
If the other party agrees to bow out and the lender agrees that you can afford the mortgage alone, you can remove the person from the mortgage without a buyout.
In this case, you will process a “transfer of equity” involving your chosen solicitor handling the paperwork.
You can expect it to take approximately 30 days to complete, but some lenders take a little longer to finalise processing.
The amount of equity each party has in the property is determined by the type of joint mortgage you have.
For instance, a “joint tenants” mortgage means that both parties have equal equity in the property.
A “tenants in common” mortgage doesn’t imply a 50/50 ownership but rather an agreement in place that stipulates each party’s share in the property.
This means one may have more equity than the other, possibly due to a higher deposit amount or higher portion paid towards the monthly mortgage instalments.
In both instances, you will apply for a new mortgage as a sole owner or add someone new in a joint application.
A Word of Warning
Removing someone’s name from a mortgage in the UK comes with financial implications.
The remaining party will be liable for the mortgage, which may significantly increase their monthly financial responsibilities.
Before deciding to remove someone from a mortgage, it’s a good idea to do some budgeting and see if it’s the right course of action for you.
Using a Mortgage Advisor
To ensure that you don’t put yourself in a poor financial position and to ensure that the mortgage lender you approach is most likely to assist you, it’s recommended to use a professional mortgage advisor or broker.
A mortgage advisor can present the options to you, prepare your application for the best possible outcome, and assist you every step of the way.
Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.
