In this brief guide, we will discuss walking away from a joint mortgage.

What to consider when walking away from a joint mortgage

Walking away from a joint mortgage will involve transferring your equity to the other party in the mortgage or someone else. If you have a joint mortgage you should note that the mortgage lender will hold

Without a tenants in common

Without a tenants in common agreement, you will need to get the consent and permission of the joint owner in order for you to sell your shares.

If they agree, you can do a transfer of equity and inform the mortgage lender.

The mortgage lender will need to carry out mortgage affordability checks to ensure the person can indeed afford the monthly mortgage repayments on their own.

If the joint owner refuses to buy your equity in the property and refuses to let you sell it to someone else then you may have very little options but to seek legal options to force the sale.

In some cases, you may be able to make a request to the mortgage lender to let you out of the mortgage.

Depending on your circumstances, the mortgage lender may let you walk away from the joint mortgage.

When there is a tenant in common

Walking away from a joint mortgage would be much easier if you have a tenants in common agreement rather than being joint owners.

With a tenants in commons agreement, you can sell your shares in the property to anyone without needing the consent of the other owner.

Asa joint owner you will need to have the permission of the other owner in order for you to sell the shares in your property.

Although you have a tenants in common and can sell your share of the property, you will still need to get out of the joint mortgage.

Walking away from a joint mortgage

To walk away from the joint mortgage you can either get the person who you are selling your shares to replace you on the mortgage or if the person does not wish to purchase further equity in the property by paying their share monthly mortgage repayments( the same share you were paying) then the remaining owner will be the only one on the mortgage.

You should note: the person will need to be on the mortgage for them to be on the title deed and so in short: you won’t be able to sell your shares except the person is listed on the mortgage.

It isn’t that simple though.

The mortgage lender will need to approve whatever structure is chosen.

This means if there will now be just one person on the mortgage then the mortgage lender will want to see that that one person can afford the monthly mortgage repayments for the whole mortgage.

If they can’t then the mortgage lender will not let you walk away from a joint mortgage and you will remain liable. This means the mortgage lender will not let you take your name off the title deeds and replace it with the sole name of your co-owner.

If you want to replace your name on the joint mortgage with another person’s name and walk away from the joint mortgage then the mortgage lender will need to approve this person.

The mortgage lender will put this person through the mortgage affordability checks to ensure they can afford the mortgage.

If they can afford the monthly mortgage repayments then the mortgage lender will let you walk out of the joint mortgage.

FAQs: Walking away from a joint mortgage

Can I walk away from a joint mortgage?

Yes, you can walk away from a joint mortgage but you will need to be allowed to do so by the mortgage lender. The mortgage lender will only let you walk away if the party or parties left or added on the joint mortgage can afford the mortgage.

What happens to a joint mortgage when you split up?

If you split up and you have a joint mortgage you will still remain liable for the mortgage and the mortgage lender can come after you for any defaults or missed repayments. These will also be recorded on your credit score.

Can you remove someone from a mortgage without refinancing?

Yes, you can remove someone from a mortgage without refinancing by doing a transfer of equity or adding someone else to the mortgage if the mortgage lender approves.

In this brief guide, we discussed walking away from a joint mortgage.

if you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.