Remove name from mortgage

The Na

Hi,

Wonder if people can help. When I applied for mortgage few years ago, they needed my Mother's name added to the mortgage for it to be approved. She has no vested interest and her name is not on the deeds, just the mortgage. I pay for the mortgage each month and have never missed a payment. I am also paying for her Life Assurance and is costing alot each month and can't get it reduced due to her age. I heard that it's possible to request the bank to remove my Mother's name on the mortgage citing reasons that she is retiring, I'm paying mortgage on my own and have no difficulty doing so and I want to reduce cost of my month Life Assurance payments etc.

Has anyone any experience on this? Is it that straightforward? What other compelling reasons can I give? I can provide P60s and letter from work confirming my salary and my position at work.

Cheers

Pablo Sanchez

I tried something simiar myself a couple of years ago. They said it could be done, but basically i would need to re apply for a new mortgage in my own name alone. Since my earnings are lower then when i took the mortgage out, and the fact that i would lose my tracker i forgot about the idea quicksmart!

Tow

You should look into removing the life insurance, it is not a 'hard' requirement for a mortgage.

If the insurance just covers the mortgage and is with same the bank, I would get your mother to write them a letter to cancel her cover. They then have to act on the letter or give you a valid reason (look for it in writing) as to why they can't cancel it. Do not just phone them up, as you may just get a 'no' from a low level employee assigned to phones that day.

The Na

They can't remove her Life Assurance as her name is on the mortgage so both of us need Life Assurance to cover it. Only way it can be removed is to remove her name altogether.

Anyone else have any experience or suggestions on removing name from mortgage?

Thanks

homer911

Tow wrote: »

You should look into removing the life insurance, it is not a 'hard' requirement for a mortgage.

If the insurance just covers the mortgage and is with same the bank, I would get your mother to write them a letter to cancel her cover. They then have to act on the letter or give you a valid reason (look for it in writing) as to why they can't cancel it. Do not just phone them up, as you may just get a 'no' from a low level employee assigned to phones that day.

Good advice. The issue of negative equity may come up however - you might also try offering to use the saved LA premium as an additional repayment as an incentive for the bank

Tow

See this for more info: http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_protection.html

Note the 50 age limit, and being a requirement to getting the mortgage, you need to look through your original documentation. Do not rely on what the bank staff tell you and get responses in writing.

If the answer is still no, you are still free to shop around for better value than the banks own offerings, remember you only need enough cover to pay off the mortgage. Mortgage Protection policies tend not to be very expensive, you may also have more cover than required.

phormium

Is you life policy paid as part of your mortgage payment every month or is it separate? Is it assigned to the bank or a stand alone policy? If not assigned and not included in monthly payments then I would be cancelling it and replacing with a policy in your sole name only. Very little they can do about it and I am presuming your mother is over 50 if she is retiring so there should be no issue.

Pablo Sanchez

If the life policy is assigned to that bank, the bank need to release their interest in the policy before it can be cancelled.

If you simply cancel the Direct Debit payment to the bank the policy will lapse within a few weeks. This may be an option, but the lender will be informed of the lapse.

They may do nothing about it, but its likely you will be in breach of your mortgage contract if the policy lapses. In years gone by the banks have paid little intention to people maintaining their life cover, but these days i can tell you for a fact that they watch it very carefully.

killers1

Ok there is 2 separate issues here....

1) To have your mother removed from the mortgage your salary will need to be sufficient to qualify for the amount currently outstanding based on the banks current lending calculator.
2) If the property is in negative equity they may be more reluctant to allow this to be done as they might want the security of having the second party to the mortgage in case you lost your job etc. In reality some bank's use this scenario as a way of getting people to reduce the amount o/s i.e they'll agree to your request if you pay a €20k lump sum off the capital...
3) If the bank are not willing to remove your mother it doesn't really effect you both (unless she was looking to borrow for something else) as you are making the full repayment in your own right. The only effect it is having is the cost of her life cover.

In relation to her life cover if the policy is assigned to the Bank you will not be able to cancel the policy directly with the insurance company as the bank are the 'owners' of the policy and you would need their permission. You can however cancel the DD Mandate for her life policy (as someone else said above) and the policy will then lapse. If the policy is assigned the bank may or may not come back to you asking about your mothers cover. If they do I suggest you tell them that you are servicing the mortgage in your own right and that if your mother were to die it would not effect your ability to repay. The can't legally force your mother to take out cover as the mortgage monies have been lent. Put the ball back in their court by doing this and if they make an issue of it just say that you want her to be removed from the mortgage.

In summary my advice is cancel her life cover now if the premium is too expensive and whether your mother dies with or without life cover will not effect your ability to repay the loan which at the end of the day is all the bank are concerned with.

The Na

Thanks all. The monthly cost of the life policy are included in the mortgage repayment amount which is paid by direct debit. Not sure how I would go about canceling that?

So if I wanted to remove my Mother from the mortgage, what are the best and common reasons to give? My salary more than covers the monthly repayments plus I also receive rental income so the net payment is approx 900e a month. My Mother is retiring soon and might be emigrating to another country so would like her name removed. Would they be good enough reasons to remove her name?

killers1

The Na wrote: »

Thanks all. The monthly cost of the life policy are included in the mortgage repayment amount which is paid by direct debit. Not sure how I would go about canceling that?

So if I wanted to remove my Mother from the mortgage, what are the best and common reasons to give? My salary more than covers the monthly repayments plus I also receive rental income so the net payment is approx 900e a month. My Mother is retiring soon and might be emigrating to another country so would like her name removed. Would they be good enough reasons to remove her name?

Hi Na,
Unfortunately the bank won't just remove your mother from the mortgage because you gave them a good 'reason' etc. They will ONLY do it if your salary allows you to borrow the amount outstanding based on that banks current mortgage calculator. If you want to PM the details to me I can do those calculations for you.

A previous post mentioned being 'over 50' as a reason not to have life cover. This is only when a mortgage is being taken out and there are 3 reason someone has the right to waive life cover which are:

1. Over 50
2. Property is not principal residence
3. Premiums are extremely expensive and considered too expensive and unreasonable for the bank to expect someone to have to take out the cover

Unfortunately as I said the above is only applicable when the mortgage is being taken out.

There is a long-winded way you can have the life policy cancelled and it's as follows;

The Bank will only agree to cancel the existing policy if a new policy replaces it. If your existing policy us in joint names you would each take put a separate policy ( am I right in assuming you have a Ptsb mortgage & Irish Life policy?) covering the amount and term of the mortgage. You pay the policy by DD from your own bank accounts and they don't form part of the mortgage repayment DD. You send both policy documents to the bank and they will happily cancel the existing policy as new ones have been taken out. You then cancel the DD for your mothers policy and the policy lapses...the bank then cannot force your mother to take out a new life policy....

My first port of call would be to try to have her removed from the mortgage in which case you'll need to take out a new policy in our sole name (if the cover with your mother is held jointly). Failing that I'd go down the road above.

Apart from the 'independence' you probably want by removing your mother from the mortgage ultimately the only financial burden to you or your mother is the cost of her life cover which can be bypassed...