In this brief guide, we are going to discuss adding a name to a house deed but not a mortgage.
Can you add a name to a house deed but not on a mortgage?
It is very unlikely that any mortgage lender will allow you to add a name to a house deed but not a mortgage.
In most cases, the mortgage lender will keep possession of the house dee (also known as the mortgage deed) and will only transfer ownership of the house deed to the homeowner once the mortgage balance has been paid in full.
The reason why most mortgage lenders do not allow a name to be added to a house deed but not be on a mortgage is that the mortgage lender does not want any party being able to claim ownership of the home without having the liability of the mortgage which is secured on the property.
By adding a name to a house deed but not on a mortgage, the owner may try and sell the home without having to pay off a mortgage balance which is secured on the property.
Although we are not aware of such a thing happening yet in England, it isn’t beyond the realms of possibilities and hence almost no mortgage lender will not allow you to add a name to the house deeds without adding it to the mortgage.
On the other hand, a mortgage lender may approve of a joint borrower sole proprietor mortgage which is when a borrowers mortgage affordability is assessed but they are not on the title deed but rather the mortgage.
What will your name on the house deed and not on the mortgage mean?
If anyone was to be on the house deed but nit on the mortgage a charge will still be registered on the title which means any person trying to sell the property will need to clear whatever is owed and remove the charge on the property
What to do?
If you want to get your name on the house deed but the mortgage lender won’t let you then this is likely because you have failed the mortgage affordability checks or are insistent on not being on the mortgage.
To have your name added on the house deed, most mortgage lenders will also want to see it added to the mortgage.
You will need to pass the mortgage affordability checks so the mortgage lender can add you to the mortgage and the house deeds.
Before this, you will need to decide if you want to own the property equally as a joint borrower or if you want a “tenants in common” agreement with whoever is currently the sole owner of the property.
When looking to add you on the mortgage and subsequently the house deed the mortgage lender will assess your affordability for a mortgage as you will now be jointly liable for the mortgage and if anything should happen to the other party on the mortgage you will be solely liable.
The mortgage lender will assess your income, your credit score and your current circumstances.
The mortgage lender will want to know that you earn enough to afford half of the mortgage and the whole mortgage should anything happen to your co-owner.
Mortgage lenders typically use a mortgage multiple to work out your mortgage affordability but more stringent checks mean most mortgage lenders will now take a deep dive into your finances determine if you can indeed afford to take out a mortgage.
They will run a mortgage stress test to see how your affordability copes given different circumstances.
Your credit score
Mortgage lenders will now check your credit score to ensure you haven’t had any bad credit habits and to see what the total amount of debt you currently have is.
If you have had bad credit then you may find it much harder for a mortgage lender to allow you to add your name on the house deed and mortgage.
Bad credit could include:
- Missed credit repayments
- Late credit repayments
- Home repossessions
- No credit history
- County court judgements
- A bankruptcy
- Individual voluntary agreements
- Debt management plans
- Payday loans on your credit file.
To assess your mortgage affordability you may need a mortgage broker.
A mortgage broker will help you assess if you can afford a mortgage and what mortgage lenders may be willing to add you to the mortgage based on your mortgage affordability.
If the current mortgage lender is not keen on adding yu then a remortgage may need to be taken out with you as a joint borrower to the new mortgage.
In this brief guide, we are going to discuss adding a name to a house deed but not on a mortgage.
If you have any questions or comments please let us know.