The process of adding someone to a mortgage is quite common. The most common scenario is adding a long-term partner. The actual process is actually pretty straight forward, it’s just the consequences of the process which I think most people should be most cautious about.
How to add someone to your mortgage
If you want to add someone to your mortgage you need to contact your mortgage lender to arrange it. Bear in mind that there will be costs involved. The costs could include arrangement fees, legal fees and possibly even additional stamp duty fees. Yeah, more tax…it never stops.
It doesn’t really matter whose name the house is under when it concerns married couples. Both involved have rights to the property, so each individual would have a claim on the property irrespective of whose name or names appear on the deeds. So there’s no real need to add your partner on the mortgage if you’re married.
In the event of death of the deed holder, the property will automatically pass from one spouse to the other, and provided life cover was in place to repay the mortgage there would be no advantage to adding a partner to it.
Adding a partner
If you’re not married but you want to add your partners name onto the mortgage, by doing so the property will ensure you both get fair rights if the property is sold.
However, if you initially purchased the property (before meeting your partner) and have built up equity over the years, it’s wise to protect your investment in case of unforeseen circumstances.
Under a tenants in common arrangement each half of the couple own a defined share of the property agreed at the outset. If you have joint tenancy agreement you will jointly own the property in full. My advice would be to speak to a solicitor about arranging either of these arrangements.
Be careful before adding your partner to your mortgage
At the beginning of this article I mentioned that you should be cautious of adding someone to your mortgage. I know it’s a negative way of thinking but you should always ponder on the question, “What if shit happens?” You maybe in the best relationship of your life, but that doesn’t mean circumstances won’t change. Trust me, I’ve had a girl tell me she loves me one week, only to tell me I’m the scum of the earth the next. It happens. It’s life.
On that note, I would definitely arrange a tenants in common agreement if i’ve built up equity in a property by myself. Sure, my partner may get offended, but I’d feel a lot safer. If later on we split up, why should she taste the fruits of my labour? Not going to happen. I’ve seen loads of people take a big hit when it comes to separation and property. One person is always laughing to the bank, while the other is sitting there with his/her head buried in their hands wondering, “why the fuck didn’t I protect my assets”- it’s because you’re a S-U-C-K-E-R.
However, if your partner has put in an equal amount of investment, or is willing to do so, then adding him/her to get a 50% cut is perfectly fair.
Tenants in common- get what you deserve
If your partner will eventually invest 20% of the property’s value, while you’re investing 80%, then you can arrange it so you’ll get the same shares back if you decide to sell the property. Of course, the slicing of the pie can get a lot more complicated, but that’s just the general principle. As mentioned, you can define share of the property at the outset, which I think is the fairest way of doing it- you get back what you put in.