Posted on 22 April 2010 by mrs pearson
My son and his girlfriend bought a house together a year ago on a fixed rate mortgage but have now split up. My son wants to keep the house on himself, but rent it out for now. Is there a way for him to get her name took off the mortgage without remortgaging or will he be able to change the mortgage to a buy to rent mortgage?
His current Lender may be willing to grant their consent for the property to be let and he should discuss this at the same time as asking them for consent to transfer the existing mortgage to his sole name. There will normally be an administration charge payable and they will want to assess his ability to support the mortgage on his own before they release his ex girlfriend from her mortgage covenants. It will also be necessary to instruct a solicitor to prepare and execute the necessary legal documents and again they will be some small costs involved with this.
If it is necessary to remortgage to a buy to let mortgage, then the transfer of the property can be dealt with at the same time. He needs to be aware that any free legal service incentive will not usually cover the costs of any change in title and he will be expected to pay this part of the Solicitor's costs. The Lender will want to make sure that the rental income covers the monthly mortgage payments and leaves room for a contingency fund to be built up, typically they will look for a monthly rental figure of 125% of the monthly mortgage payment.
In either situation it is possible that he will have to pay an early repayment charge to get out of his existing mortgage deal and he needs to check when this would apply and how much it will cost. This could well be the deciding factor for him when deciding whether to let the property.
I recommend that your son speaks to his existing Lender first and then consults an independent mortgage adviser to check his different options.
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