Adding Your Daughter To Your Mortgage: What You Need To Know

Adding a family member to your mortgage is a common process, and you have a few options to do so. Firstly, you can contact your lender to see if you can simply add your daughter to your existing agreement through a Transfer of Equity. Alternatively, you can refinance your mortgage and switch to a new joint agreement. This will involve remortgaging and applying for a new joint mortgage with your current lender or a new lender.

Adding a daughter to an existing mortgage

Adding your daughter to your existing mortgage is a common process, but it is a legal process that will require the services of a solicitor. There are two main options for adding someone to your mortgage. You can either add them to your existing agreement through a Transfer of Equity, or refinance your mortgage and switch to a new joint agreement.

To add your daughter to your existing agreement, you will need to contact your lender to apply to have her name added to the mortgage. She will need to undergo the same standard checks as a new applicant, including income and affordability assessments. Lenders will also want to ensure that the mortgage is affordable for the new homeowner. If your daughter has a poor credit score, it may affect her ability to be added to the mortgage. From the lender's perspective, having another person's name on the mortgage can offer more security.

If you are tied into a fixed-term, remortgaging may not be the best option as you may be subject to early repayment charges. In this case, you could add your daughter to your existing policy or wait until your fixed term expires and then look at remortgaging to a joint mortgage. If you do decide to remortgage, you can either stay with your current lender or choose a new one.

Adding someone to your mortgage also involves making legal changes to the property deeds. Your lender may charge an administration fee for these changes, and there may be stamp duty obligations to satisfy.

Legal changes to property deeds

Adding your daughter to your mortgage involves making legal changes to the property deeds. This is a legal process, so you will need to instruct the services of a solicitor.

To add someone to your mortgage, you will need to contact your lender to see if you can simply add your daughter's name to your existing agreement. Be prepared for them to say no, however, as this will be their answer in most cases. Instead, they will likely make you refinance your home, in effect taking out an entirely new mortgage.

If you are tied into a fixed-term, then remortgaging (to add someone new onto the policy) probably won't be the best option, as you'll likely be subject to early repayment charges. In this case, you could either add your daughter to your existing policy or wait until your fixed term expires and then look at remortgaging to a joint mortgage.

To add your daughter to your existing agreement, you will need to apply for a Transfer of Equity. Your daughter will be subject to the same standard checks as a new applicant, including income and affordability. From a lender's perspective, having another person's name on a mortgage can offer more security, but lenders will still carry out their usual checks to make sure the mortgage is affordable for the new homeowner.

You may also be charged stamp duty, as your daughter is technically purchasing part of your property. It is also possible that your lender will charge you an administration fee to make the changes.

Remortgaging to a joint mortgage

Firstly, you will need to contact your lender to apply to have your daughter's name added to your mortgage. She will be subject to the same standard checks as a new applicant, including income and affordability. Lenders will also check her credit history, as they will be jointly responsible for the mortgage with you. If your daughter has a poor credit rating, it could affect how much the lender allows her to borrow.

If you are tied into a fixed-term, remortgaging may not be the best option, as you may be subject to early repayment charges. In this case, you could add your daughter to your existing policy or wait until your fixed term expires and then remortgage to a joint mortgage.

The process of removing someone from a joint mortgage is relatively simple and straightforward, as long as everyone agrees. However, it is important to note that if you fail to meet the combined payments, this failure will go on both parties' credit reports. Defaults on mortgage payments can cause serious problems for future mortgage or loan applications.

Transfer of Equity

Adding your daughter to your mortgage is a common process and can be done in several ways. Firstly, you can contact your lender to see if you can simply add your daughter to your existing agreement through a Transfer of Equity. This will involve legal changes to the property deeds and standard checks for your daughter, such as income and affordability. There may also be stamp duty obligations and administration fees to consider.

Alternatively, you can refinance your mortgage and switch to a new joint agreement. This will involve taking out a new mortgage, which may offer better rates. You can choose to do this with your current lender or a new one. To do this, you will need to fill out a Uniform Residential Loan Application, which will require your full names, social security numbers, pay stubs, bank statements, and tax returns. Once the new loan is processed, you will need to sign the documents and pay any closing costs.

If you are tied into a fixed-term, remortgaging may not be the best option as you may be subject to early repayment charges. In this case, you could add your daughter to your existing policy or wait until the fixed term expires before remortgaging.

Costs and fees

Adding your daughter to your mortgage can come with a variety of costs and fees. Firstly, you will need to contact your lender to apply to have your daughter's name added to your mortgage. The lender will then carry out standard checks on your daughter, such as income and affordability assessments, to ensure that she meets their affordability and credit criteria. Your lender may charge you a fee for this service, and they are under no obligation to add your daughter if she does not pass these checks.

If your lender agrees to add your daughter to your mortgage, you will need to hire a solicitor to provide legal advice and help you with the legal changes to the property deeds. The solicitor will also help you decide how to divide the ownership of the house. You will need to pay a fee for the solicitor's services. In the UK, it typically costs £40 to add a name to the house deeds, but this can be more if you own more than one property.

Additionally, you may be charged stamp duty, as your daughter is technically purchasing part of your property. There may also be other administration fees charged by the lender to make the changes to your mortgage policy. If you are tied into a fixed-term with your current lender, remortgaging may not be the best option as you are likely to be subject to early repayment charges.

If you decide to refinance your mortgage and switch to a new joint agreement, you will need to cover closing costs and other fees that you originally paid when you first secured your mortgage. These closing costs can be very expensive, ranging from three to six percent of the remaining principal on your loan. You may also face high additional costs if you need to cover a 'deposit' and have enough funds to repay the party being removed from the property. There may also be additional costs if you need to hire a lawyer to make necessary changes to your will.

Frequently asked questions