If you have a joint mortgage with someone and want to remove your or their name from it, there are several options available to you. However, it’s important to remember that removing a name from a mortgage can be a complicated process, and it is advisable to seek professional legal and financial advice specific to you and your circumstances. In this article we will highlight some of the common options when removing a name from a joint mortgage.
The place to start is to decide who, if anyone will remain in the home. If no one will stay in the property then the obvious answer is to sell the property and split the proceeds.
Sell the Property
One way to remove your name from a joint mortgage is to sell the property. If you and the other person on the mortgage agree to sell the property, you can use the proceeds from the sale to pay off the mortgage. Once the mortgage is paid off, your name will be removed from the mortgage agreement.
If one of you wants to continue living in the property then there are more options to consider, the first being what happens to the equity in the property. How will that be divided, or will it stay with the person remaining in the property. You will need to agree this before deciding which course to take. For example, you will need a “deposit” of a certain percentage, otherwise some of the options below might not be available to you.
Refinance the Mortgage
One option is to refinance the mortgage. This involves finding a new lender who will agree to take over the mortgage and remove your or the other person’s name from the agreement. However, it’s important to note that you may not be able to refinance if you have a poor credit rating or if the property has decreased in value since you took out the mortgage or if the person taking on the mortgage does not meet the affordability criteria of the lender.
Transfer the Mortgage
If you and the other person on the mortgage are both happy for the other to take over the mortgage, it may be possible to transfer the mortgage into a single name. This involves applying to the lender to remove a name from the mortgage agreement and transfer the mortgage into the other person’s name. The person remaining on the mortgage will need to satisfy the lender that they can afford to pay the mortgage on their own.
Retaining a Stake
You could choose to retain a stake in the property while removing your name from the mortgage. This involves creating a legal agreement that outlines your share of the property and any profits made if it’s sold in the future. This can be a good option if you want to keep a financial interest in the property but don’t want to be responsible for the mortgage payments.
Using a Guarantor
If you can’t afford to pay off the mortgage or buy the other person out, you may be able to use a guarantor. This involves finding someone who is willing to take responsibility for the mortgage payments if you can’t make them.
Paying off the Mortgage
Finally, you can choose to pay off the mortgage in full to remove your name from the agreement. This can be a good option if you have the means to do so and want to avoid any legal or financial complications.
Seek Professional Advice
Removing your name from a joint mortgage can be a complex process and there may be legal and financial implications to consider. For this reason, it’s advisable to seek professional advice from a solicitor and/or a financial advisor before making any decisions.
