Adding a partner to a mortgage
The process of adding you to the mortgage and title deeds is called a ‘transfer of equity’ and is a relatively straight forward thing to do. However there’s one area that you do both need to consider, which is how the ownership is to be split. As far as the lender is concerned, all joint borrowers are what is known as ‘jointly and severally responsible’ for the monthly payment. This means that in the eyes of the lender, irrespective of any individual arrangements you may have, both borrowers are equally liable for the whole of the mortgage.
Joint Tenants or Tenants in Common?
However, the ownership can be set up differently. Most couples when they buy a property do so as ‘joint tenants’, which means that both parties own the whole of the property equally, and in the event the property is subsequently sold then equity is split 50/50. As your partner already owns the property, they may want to consider setting up ownership under ‘tenants in common‘, where a specific percentage of the ownership is allocated to each party. i.e. your partner has 80% and you have 20%. This won’t affect the mortgage, but would protect your partners current equity in the property, in the event of any split in the future.
If you’d like to discuss this in more detail, including some lender and product options, then please contact one of our consultants on 023 8235 2300 and they’ll be able to give you a clearer idea of how we can help.
