Is it possible to be removed from a mortgage?

rogeroleary

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I was talking to a mortgage advisor yesterday in relation to financing an investment property I'm looking at. I already have a buy to let with a smallish mortgage on it, I also have a smallish mortgage on my own home.

In addition to these about 2.5 years ago I invested 110k into a house with my daughter which she lives in (and pays the mortgage) because a) I wanted to get her on the ladder and b) I wanted her to go for a short term mortgage ie. 15 years.

My daughters house is worth around 300k with a mortgage of > 120k on it thanks to the terms being only 15 years (with 12.5 remaining). However, apparently because my name is on the mortgage it is assumed that I have full liability for this mortgage apparently.

So the mortgage advisor has ask if I had considered the option of requesting the lender to remove me from the mortgage on my daughters house, as my daughter may have an income sufficient to carry this commitment on her own now.

If that's possible I think it could be very helpful, but I want to make sure there are no unintended consequences. Although the house has risen in value over the 2.5 years I am only interested in getting my 110k back (at some stage).

Any views on whether the bank would agree to removing me from the mortgage given the very low LTV on her house now?

Roger
 
It will depend on her income more than the LTV, she will need to be able to qualify for the full amount owed at today's lending criteria. If she qualifies the bank would either remove your name or do a brand new mortgage in her name only.
 
A lot depends on your legal situation wrt your daughters house.

Do the two of you co-own the house, and is it as joint tenants or tenants in common ?
What is the plan for you getting your 110K back ?
 
Taking your name off the mortgage does not affect your ownership of the property.

Assuming you are on the deeds now, you will still be on the deeds after your name comes off the mortgage.

Or will the bank insist that if your name comes off the mortgage, it must come off the deeds as well.

If you are not on the deeds, then it doesn't matter either.

But the best approach is to ask the solicitor who acted for you and your daughter in the purchase of the house.

Although you didn't ask the question. If you already own 2 1/2 properties, you should probably not be borrowing money to buy another one.

Brendan
 
Thanks Monbretia....she should be able to meet the criteria for the balance outstanding

Huskerdu - it's not tenants in common - we agreed to purchase on a 75/25 basis with me being the greater. We also agreed that we would review it after 3 years to see if was working out for her / if she wanted to buy me out (probably not an option for her yet) or if she wanted to move back home at any stage and we could rent / sell it.

Brendan, I am on the deeds, and I'd want that to continue until we come to a different joint decision regarding selling / renting. I understand you point about owning 2/12 properties but I am looking at another one as a pension play - the main buy to let I have has been kind to me so I'm looking at one more on a 10 years max window.

Roger

PS. the house with my daughter has worked out very well.....there's no tension, it's saved her a bucket of rent which would have been wasted and she's retained her savings (as equity), in fact if we were to sell she'd been doing quite nicely out of it.
 
Bank might not be so keen to let you remain on deeds and not on mortgage. Usual way is no problem two on mortgage, one on deeds but two on deeds, one on mortgage not so good. I know where I worked we wouldn't allow that but banks differ so you'll need to check.
 
What benefit is it to the bank to remove you from it? It just increases their risk from what i can see.
 
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