How do you transfer equity if there is a mortgage?
A transfer of equity is more complex if there is a mortgage on a property, as the mortgage lender needs to give permission for the transfer to take place. That is because whoever is left on the property title deeds will be liable for the leaving person’s share of the existing mortgage. The mortgage lender will want to check that the remaining owner or owners can afford these higher mortgage repayments.
When someone is being added to a property, the mortgage lender will want to check their financial suitability. They will carry out checks on that person before they agree to the transfer.
If the mortgage lender does not consent to the transfer of equity, it can only go ahead once the outstanding mortgage is paid off. To do this, the remaining owner could apply to remortgage with another lender who will agree to the transfer.