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There may become a point where an individual considers adding someone to their mortgage. An example may be to add a new partner who is moving in with you.
But where do you start?
In this article, we’ll explore the ins and outs of adding someone to a mortgage, covering important considerations and answering common questions.
It is indeed possible, but it’s not the most straightforward process.
There are some steps involved and some considerations to understand first.
If you have a mortgage adviser, it’d be worth getting in touch to discuss your options in more detail, but there’s usually two main options:
Remortgaging is where you refinance your existing home and move to a new mortgage lender. It may be possible to add someone as part of the process.
Contacting your existing mortgage lender is pretty much what it says on the tin – you can give them a call and discuss the potential option of adding a second person and what the process would be for this.
Both of these options typically include a comprehensive financial assessment. The lender will be looking at their credit history, income, and overall financial stability.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
There are various reasons why you might choose to add someone to your mortgage.
One example may be to increase your borrowing capacity, making it easier to qualify for a larger loan amount. Although you already have the mortgage, this may help with remortgaging if you have had a change in circumstances.
With costs on the rise, having someone else on the mortgage with you can also provide financial support.
While it’s possible, the process can be complex and typically involves refinancing.
There’s also many reasons why a person may look to remove someone from a mortgage.
One unfortunate example would be relationship breakdowns. Another example may be if you bought with a family member and you now want to go your separate ways.
The process of removing someone from a mortgage may be more difficult than adding someone, mainly due to the loan needing to be affordable solely based on the one income.
Another complication is that, if you need to raise additional funds on your mortgage to ‘pay off’ the other person, you’ll need to have enough equity in your home to do so.
Equity is the difference between the value of your property and the mortgage balance.
Open communication is key. If one person is struggling, it’s important to discuss potential solutions as soon as you can and plan accordingly.
Having a mortgage, each person is liable for the debt, and failing to keep up with the repayments can have a huge impact on your ability to obtain credit, and may even result in a repossession.
It’s therefore hugely important to not ‘over-stretch’ yourself and to have complete trust in anyone you enter into a mortgage contract with.
There are some ways that you can mitigate being unable to keep up with your mortgage repayments. For example, if you are struggling due to being unable to work, having income protection in place could prevent this.
It’s crucial to be aware of the legal implications of joint ownership. It’s important to discuss this with a qualified solicitor.
There are two primary types of ownership – joint tenants and tenants in common.
Joint tenants have equal ownership, while tenants in common can have unequal shares. This decision can have significant consequences in terms of inheritance and ownership rights.
Regardless of the ownership type, in terms of the mortgage, each person will have joint and several liability for the mortgage, meaning that each person on the mortgage is individually responsible for the entire mortgage debt.
Another crucial aspect to keep in mind is that by adding someone to your mortgage, you’re creating a financial partnership.
Put simply, you’ll both be linked, meaning that any financial actions, positive or negative, will affect both individuals.
You may wish to download copies of your credit reports and check that everything is in good standing.
A further important consideration is to check whether stamp duty will be applicable. Be sure to check with HMRC.
To summarise, make sure that you do your research, speak to professionals (mortgage adviser and solicitor) to understand what is possible for you, and do not rush into a decision. After all, a mortgage is likely the largest debt you’ll have.
We focus on building long-lasting relationships with clients.
We therefore charge a reduced fee for our existing client remortgages.
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As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments. Think carefully before securing any other debts against your home or property. The Financial Conduct Authority does not regulate commercial buy to lets and some forms of commercial mortgages. You may have to pay an early repayment charge to your existing lender if you re-mortgage
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Rose Hill Financial Services Ltd is authorised and regulated by the Financial Conduct Authority. You can find us on the Financial Services Register https://register.fca.org.uk/ under reference 912303. Registered office address: 1 Bell Street, 2nd Floor, London, England, NW1 5BY. Registered in England and Wales. Company registration no: 11997519.
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