09 Mar 2017
There are various steps along the path to sharing your life with someone. From leaving a toothbrush in their place to having a drawer set aside for a change of clothes, there are seminal moments along the way that assume a certain significance.
Deciding to share a mortgage is obviously one of the biggest commitments you can make, especially if one partner currently holds a sole name mortgage. It’s a big step but it doesn’t have to be a difficult one.
So what’s involved in moving from a single mortgage into a joint mortgage? Well, the first step is to contact your local EBS office and chat to a mortgage advisor about what you need.
How to change to a joint mortgage
The application for a joint mortgage will basically be assessed in the same way as a single mortgage with some additional steps. Phew! The new mortgage will then be used to pay off the sole name mortgage if it’s successful. After that, the mortgage will be held in both names – in sickness, and in health.
The person being added to the mortgage will first need to undergo an affordability assessment, which isn’t as scary as it sounds. So their income and ability to pay a mortgage will be assessed and they will need to provide all the standard documentation like bank statements.
Your local office will initially assess the joint mortgage request and then send it on to be assessed by an underwriter, who’ll come back with their decision. This can be an Approval in Principle (which lasts six months); it can also be a request for further information if you’re just not quite ready yet.
We’ve been approved! What’s the next step?
Wohoo! What happens next, is that a valuation will need to be carried out on your home, which will set you back €150 from an EBS approved valuer. Once the valuation has been received and there are no problems, a full loan application will be submitted.
Now it’s time to sort out the essentials which come with buying a home - home insurance and mortgage protection. EBS offers home insurance and mortgage protection. Find out more here.
Once completed, the applicants’ solicitor is notified that the loan has been approved and provided with the legal documents that they need to sign.
Keep in mind – this is the time when you’ll need to pull out those rainy day savings, which will be needed for legal fees and the property valuation, all the pesky hidden costs of buying a home.
Finally, it’s time for the legal eagles. The solicitor will need to lodge documents with the Land Registry to have them amended and this will incur some fees. These fees can be determined by your solicitor.
Additional funding may be an option
It may seem like a lot of fuss to add a second name to a mortgage but it can also be a chance to review your situation. You don’t have to limit yourself to a name change.
If you’re planning to go from a sole name mortgage to a joint mortgage, you can also request additional funds for renovations or improvements.
This request will be subject to approval and an affordability assessment will need to be carried out. Still, it’s a good chance to reassess what you want from your home and to decide if additional funding could help to make this happen.
How will the new loan differ from the old loan?
Since you’re effectively taking out a new mortgage, you can expect some differences between the old and the new mortgage. It’s important to balance up the potential impact of moving to a joint mortgage and decide if it’s worth it.
New business rates will apply to the new loan and you’ll need to take out new insurances as part of the new loan application. You may be entitled to a Tax Relief at Source. Visit Revenue to find out more.
You can face some additional costs as a result of the transition. If you’re currently on a fixed rate mortgage, you could face an early redemption charge or a fixed rate breakage fee. If you have a tracker rate, pop in to us for a chat and we can talk you through any terms and conditions, etc.
What else should you know?
You could get more than you bargained for if you attach yourself to a mortgage without checking the history of the mortgage in advance.
Both people should be open about their credit rating when they start discussing a move to a joint mortgage. It’s best to discuss everything before applying for a mortgage together. You can get a credit report for €6 per application from www.icb.ie to see where you both stand before deciding if you want to go further.
If your current EBS mortgage is in negative equity, it could still be possible to transfer from a sole name mortgage to a joint mortgage. You’ll still be subject to an approval process but it isn’t enough to prevent you from applying. If you’d like more info on negative equity, pop in to us for a chat!
Making the change can be easier than you think but the first move is always to chat to your mortgage advisor and find out what you need. Once you’ve got the ball rolling, you can then go about achieving your goal and take the necessary steps to complete your dream together.
Thinking of applying for a joint mortgage?
EBS d.a.c. is regulated by the Central Bank of Ireland.