If you and your partner have been living together, there may come a point where you want to add your partner's name on to the mortgage alongside yours.
If your partner is helping to pay off the mortgage or contributing to the bills, and especially where children are involved, it can be a sensible move to get them added to the property deeds and the mortgage.
However, it’s not just a case of changing the names on the mortgage with your lender. You'll need to apply to have your partner's name added, which will be subject to the standard income and credit checks, and you'll also need to have a solicitor involved to add the new name to the title deeds. The legal process is known as a ‘transfer of equity’.
Approach your existing lender
It's worth approaching your existing mortgage lender to see if they'll add the new name on to your current mortgage, especially if you're on a deal which is subject to Early Repayment Charges(ERCs). Your lender will run through a similar process to a new application, so they'll check affordability, credit history and the identity of both applicants prior to agreeing to add someone on to the mortgage.
Your current lender is likely to charge a fee for processing the request, and they're under no obligation to add someone on if they don't meet their criteria, regardless of how well you've managed your mortgage so far.
Remortgaging
Another option for you to transferyour home and mortgage into joint names is to remortgage the property to another lender. Again this will be treated as a new mortgage application and you'll need to provide proof of income, pass credit and affordability checks and have the property valued. It’s worth remembering that even if your existing lender won't approve the addition of another person then other lenders may as criteria will differ from lender to lender. It may also be possible to obtain a better rate by switching lender.
Association of credit
It's always worth bearing in mind that if you do change the mortgage to a joint basis or take ajoint bank account, your partner’s credit will become associated with your own.
If you have a good credit rating, you need to consider that if your partner’s credit history is poor you could struggle to remortgage your property or borrow in the future.
Legal work
It’s vital that you take legal advice before starting the process of adding someone to your mortgage and title deeds. There are wider implications than just the mortgage payments which could include Stamp Duty, tax implications if it’s not your main residence and potential inheritance implications if you want to leave the property to someone specific.
There are often two options for those wanting to add a spouse onto the mortgage:
- Tenants in common – typically the couples in this situation each own a percentage of the house, which they are able to pass down to their children in the event of their death.
- Joint tenants – the most common option, you will both have equal rights to the whole property, and in the event of a death the property passes on to the other owner.
Your solicitor will be able to advise you on the most suitable way to set the property ownership up and of any potential tax liabilities that may arise. It’s also important to make sure you change any wills you have made to keep them up to date.
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