In this brief guide, we are going to discuss adding a partner to a mortgage, the considerations you should make before and their implications.
There are many couples, who are sometimes unmarried in the UK and live with their partners but are not on the mortgage.
After a few years of cohabitation, you may want to add your partner to your mortgage.
Adding your partner to your mortgage will make them jointly liable for the mortgage and give them more rights to reside in the house if you should separate.
Although adding a partner to a mortgage doesn’t mean they will automatically be added to the house deed, this will usually be the process and you should discuss if you want to be tenants in common or joint owners of the house.
You should seek legal advice on this as this may have further repercussions down the road.
If your partner has contributed to the renovation and running costs for the house over several years it is obvious to see why you may want to add them to the mortgage and the house deeds.
Adding a partner to a mortgage is not necessarily a straightforward step. Your partner will need to pass the mortgage lenders mortgage affordability checks and if they don’t then you may need to remortgage to a lender who will accept them.
You will also need to do a transfer of equity which will involve a solicitor.
There are some costs to adding your partner to a mortgage so shop around!
Steps to adding a partner to a mortgage
If you are considering adding partners or spouses onto an existing mortgage then below are the steps you should take to make sure everything runs smoothly.
Contact your mortgage lender
You should first contact your mortgage lender to see if they will be willing to add your partner to your mortgage.
Most mortgage lenders will be happy to do this but will require your partner to pass their mortgage affordability checks.
The mortgage lender will also inform you of any charges or fees involved with adding your partner to the mortgage
Remortgage to a new lender
If your current mortgage lender refuses to add someone to the mortgage then you will simply need to remortgage to a new mortgage lender who will.
To remortgage, you may need a mortgage broker who compares all the mortgage options and recommends the most suitable mortgage for you.
You should be aware that when mortgaging you may need to pay an early repayment charge to your old mortgage lender if your previous mortgage was on a fixed deal or had an early repayment charge attached to it.
You should remember that when remortgaging you will essentially be getting a new mortgage which means that the mortgage lender will put you and your partner through new mortgage affordability checks to ensure you can afford the mortgage.
If you or your partner fail these checks then you may not be able to get a remortgage which will allow you to add your partner to the mortgage.
It is important to note that when looking to add a partner to a mortgage, you will now both have your names on a credit report which means that a financial association will now be formed between the both of you and this will be visible on your credit reports.
This means if you have bad credit or a CIFAS marker this could potentially affect your partner in the future when they seek to take out new credit.
When adding a partner to a mortgage there will be other implications such as stamp duty obligations, other tax obligations, costs involving any transfer of equity and legal work involved with changing the title deeds.
There may be other implications further down the line such as inheritance or during a divorce.
You should consider this when looking to add a partner to a mortgage.
There are usually two legal routes when adding a partner to a mortgage, they are:
A joint tenancy will give both of you equal rights to the whole property and in the event of a death the property will pass onto the living owner.
A tenants in common:
A tenancy in common will give each party a share of the property which can then be passed on to their relatives in the event of a death.
In this brief guide, we discussed adding a partner to a mortgage, the considerations you should make before and their implications.