How To Remove Someone From A Mortgage

Removing a name from a mortgage is never an easy decision, but it can be a necessary step following a separation, divorce or as part of a financial restructuring plan. If you’re wondering how to get out of a joint mortgage or what steps you need to take to remove someone from yours, it can seem a complex process.

To help you, we thought we would take a closer look at the process, answer some of your most common questions, and provide some key tips to streamline the process.

Why should you remove someone from a mortgage?

Before we take a look at the process of removing a name from a mortgage, why would you need to do it? There are several reasons for taking a name off a mortgage, but the most common include:

• Divorce or separation

This is one of the most common reasons. When people co-sign a mortgage as partners but then separate, one party might want to remove the other to ensure sole ownership and responsibility and avoid any disputes or liability.

• Change in financial circumstances

If one person can no longer contribute to the mortgage payments, then removing them might simplify matters and transfer responsibility to the remaining party.

• Refinancing opportunities

Removing a name from a mortgage is not just something you do following a separation. It can also be a chance to refinance, removing a co-borrower so one party can take advantage of a lower rate or better terms on their own.

• Estate planning

Property ownership and mortgage arrangement can change as part of estate or inheritance planning.

• Simplifying liability

Mortgages create shared liability for payments and debt. If one person no longer wishes to be tied to the property or the financial obligation, removing them can clarify financial responsibilities.

Steps for removing a name from a mortgage

Whatever the reason might be, if you are wondering how to remove someone from a mortgage, the process is actually very straightforward as long as all parties are in agreement. Here are the steps to consider:

Step one: Assess your situation

The first thing you should do is thoroughly assess the situation. Are all parties in agreement? Is there an ability to transfer financial responsibility, can the mortgage be transferred to an individual without impacting repayment? Make sure you are aware of the risks and implications and ask for clarification on anything you are not sure on.

Step two: Speak to your mortgage broker

The next step is to review your current mortgage terms and speak with your mortgage broker. A mortgage broker will help you understand whether you have the financial capacity to take on the mortgage independently and may undertake affordability checks to verify your income, expenses and credit history. They will also discuss the property valuation and LTV requirements lenders will have.

Step three: Refinance or remortgage

In most situations, removing a name from a mortgage involves remortgaging to a new loan under the name of the remaining borrower. A mortgage adviser can help you decide which mortgage lender is best when taking a name off a mortgage. It’s at this point the application is made and you’re one step closer to fully removing the other name from your mortgage.

Step four: Update the title deeds

Removing a name from the mortgage usually goes hand in hand with updating the ownership details of the property. This involves a legal process known as a transfer of equity, whereby the departing party transfers their share of ownership to the remaining borrower. If the departing party is compensated for their share of the property, the process may also include financial arrangements for the buyout. A solicitor will typically assist with updating the Land Registry to ensure the ownership records are accurate.

Step five: complete and finalise

Both parties will need to sign the necessary documents and ensure all administrative fees have been paid. Once all the conditions have been met and the lender is satisfied, they will update the mortgage account and send written confirmation.

Buying someone out of a mortgage

Joint mortgages usually dictate a shared ownership of the property in question. That means when one party leaves, they will be entitled to a share of the equity accrued in the property. Your solicitor will be able to help provide you with the necessary paperwork and ensure that the balance is paid upon completion.

While this might seem complex, it can often be finalised within a month or two if everyone is in agreement. We’re a firm of Essex mortgage brokers who have lots of experience in removing someone from a mortgage so please speak to us as we’d love to help.

What if someone isn’t paying their share?

Removing someone from a mortgage because they are not paying their share is unfortunately very common. While this can be frustrating, it is important that you continue to make your payments, so your credit report is not impacted.

If your partner is no longer making the payments, speak to your lender as soon as possible. They may allow you to make a mortgage holiday while you get the necessary changes implemented or provide an alternative option such as interest only.

Top tips for removing a name from a mortgage

While removing a name from a mortgage can be an emotional time, with a specialist mortgage broker and solid financial advice, it doesn’t have to be stressful. Some top tips to remember to make the process as straightforward as possible:

• Seek advice early

Consult financial advisors, solicitors and mortgage brokers as early as possible in the process. This will help you understand all of the possible implications and allow you to better prepare.

• Collaborate and be open

Being as open as you can with the other party and ensuring regular collaboration and communication will help to minimise misunderstandings and facilitate a smoother process.

• Prepare your documentation

Make sure you have your proof of income, property valuation and other key documentation ready to go. This will help save time and effort later on.

• Check your mortgage terms

Take the time to review your mortgage terms and identify any clauses that are relevant to removing a name from a mortgage.

• Be realistic

Finally. Make sure you are realistic about the costs. From solicitor fees to potential penalties, there will be a number of expenses involved so make sure you are aware and plan for these.

Frequently Asked Questions

Can you remove someone from a mortgage without refinancing?

Removing someone from a mortgage without refinancing is difficult but sometimes possible via a transfer of equity. However, the lender must approve the change, confirming the remaining individual’s financial capacity to handle repayments independently.

How much does it cost to take someone off a mortgage in the UK?

Costs can vary widely based on your specific circumstances. Expect fees for:

• Mortgage arrangement or administrative processing.
• Solicitor services, typically ranging from £500 to £1,000.
• Stamp duty (if applicable).

Do I need a solicitor to take my name off a mortgage?

In most cases, a solicitor is necessary to handle legal documentation, particularly in a transfer of equity. Their expertise will also ensure that all documents comply with local laws and lender requirements.

Can you remove someone’s name from a mortgage without their permission?

No, removing someone from a mortgage without their consent is not permitted. Mortgage agreements are legally binding and require all involved parties to agree to any changes.

What happens to a joint mortgage after separation?

Separation or divorce doesn’t dissolve your mortgage liability. Even if one party moves out, both remain responsible unless specific steps like those above are undertaken to adjust the agreement.

Need independent financial advice?

Are you in need of independent financial advice? No matter whether you are looking at removing someone from a mortgage, are considering remortgaging, or are interested in financial planning, our team at Fairview Financial Management is here to help you every step of the way.

Want to find out more? Get in touch today!