23. Current ownership
When it comes to remortgaging a property, understanding the current ownership is crucial. The individuals applying for a remortgage may not necessarily be the current sole owners of the property. In some cases, the remortgagers may wish to add a new person to their mortgage, which can complicate the ownership structure.
Are the remortgagers the current owners?
- Property Title Register: The Property Title Register is the definitive record of property ownership in the UK. It provides details about the current owners of the property, any charges or mortgages against the property, and other relevant information such as covenants or easements.
- Checking ownership: To determine the current ownership, you or your conveyancer should check the Property Title Register. This document can be obtained from the Land Registry and will confirm who currently holds the title to the property.
Adding a new person to the mortgage
Scenarios: The remortgagers might want to add a new person, such as a partner or a family member, to the mortgage. This is common when:
- A couple is buying a property together for the first time.
- A family member is helping with the mortgage and needs to be added to the title.
- An investor is joining an existing owner in a property venture.
Legal and financial implications
- Legal ownership: Adding a new person to the mortgage often means changing the legal ownership of the property. The new owner’s name will need to be added to the Property Title Register.
- Financial responsibilities: The new person will also assume responsibility for the mortgage repayments. It’s important to understand that they will be jointly liable for the mortgage debt.
Steps to add a new person to the mortgage
- Get consent from the lender: Your mortgage lender must agree to any changes in the ownership structure. They will assess the new person's creditworthiness and financial stability.
- Legal advice: Consult with a solicitor to handle the legal aspects of adding a new person to the title. They will ensure that the transfer is done correctly and that all necessary documents are filed.
- Update the Title Register: Your solicitor will arrange for the Property Title Register to be updated to reflect the new ownership structure.
- Reassessment of mortgage terms: The lender may reassess the terms of the mortgage, which could include a new interest rate or other conditions based on the new owner’s financial status.
Other considerations
Joint tenants vs. tenants in common |
When adding a new owner, you must decide on the type of ownership:
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Stamp duty |
Depending on the circumstances, adding someone to the property title might incur Stamp Duty Land Tax (SDLT). This is particularly relevant if the new owner is taking on a portion of the existing mortgage. |
Inheritance tax |
Changing the ownership structure can have implications for inheritance tax. It’s advisable to seek guidance from a tax advisor to understand any potential tax liabilities. |
Understanding the current ownership and the process of adding a new person to the mortgage is essential for a smooth remortgaging process. By checking the Property Title Register and consulting with legal and financial professionals, you can ensure that all changes are properly documented and legally sound.