How do you remove someone from a mortgage?

There are many reasons why you may wish to remove a named person from a mortgage. It may be because of a divorce or separation, a change in personal circumstances or because the move was only ever a short-term solution to get on the property ladder. Whatever the reason, it is possible to remove someone from a mortgage and the process can be a simple and straightforward one.

What is Transfer of Equity?

Transferring equity is the legal process of adding or removing someone from the title deeds of a property. This is done when the property is not being sold and one of the owners will remain on the deeds. It is common in cases of relationship breakdowns or divorce. Figures show the number of divorces has increased in recent times, with cases rising 9.6% from 103,592 in 2020 to 113,505 in 2021. It may also be undertaken for tax purposes.

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If the person you want to remove from the mortgage agrees, it can be a very simple process and can often take around four to six weeks to complete, although some cases may be longer. It is necessary to instruct the services of a conveyancing solicitor, such as Sam Conveyancing.

How does Transferring Equity work?

To remove someone from your mortgage through this process, you first need to contact your mortgage lender to get their authority to transfer equity. This usually comes in the form of a new mortgage offer in the name of the proposed owner. Once agreed, a solicitor needs to get a copy of the title deeds from the Land Registry before preparing the Transfer Deed documents. This document confirms the name of the owner and the name/s to which is to be transferred. Once signed by all parties, the new property ownership will be registered with the Land Registry. It is also possible to remove a borrower from a mortgage and add a new name at the same time. Equity transfer can involve three parties, but all must seek legal advice beforehand.

Equity transfer is a common query, dealt with on a regular basis by both solicitors and mortgage brokers. However, removing someone from a mortgage becomes more complex if the person you want to remove does not agree. In this case, you may need to explore another option.

Other options

Another way to remove someone from a mortgage is to buy them out. To perform a mortgage buyout, you need to contact a lender, determine the value of the property and work out the outstanding amount left on the mortgage. Then check the market value to determine a purchase price and negotiate with the party in question. You may need to remortgage to buy out a former partner through a product transfer or internal remortgage.

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Alternatively, you can agree to sell the property and split the funds between you if a transferral of equity cannot be agreed. A further option, if your co-borrower agrees, is to sell your share to a third party.

Overall, removing someone from a mortgage through transferral of equity is a common and relatively simple process. In most cases, unless you are arranging a new mortgage with a new lender, the costs will be limited to legal and Land Registry fees.