Removing name on mortgage

edenbridge146

Hi folks

I was looking for some advice on Family Home etc

Basically 4 bed house is worth 500,000. Current tracker mortgage remaining is 75,000 with BOI the repayments are 700 a month and approx 7 years left.
There is a self contained granny flat on side of house which generates income of 800 a month and comfortably covers mortgage and insurances etc.
Its a HAP tenant and all above board with tax, BER and all documented.

Now the husband is retired, aged 67 and his occupational and state pensions collectively generate an income of 500 a week - 2000 a month - 24,000 a year
The wife is in employment earning 45,000 in public sector but looking to invest in another property for her pension etc as she is only in work force last 5 years

In order to 'free up' her affordability, they couple are looking at transferring the mortgage to husbands name solely but keeping both names on the deeds as its the family home. 'Kids' are 20 & 17.

Ideally the wife can get a mortgage in her own name for 3.5 times her salary
She has deposit of 50,000 so looking to purchase a house in region of 200k ironically with a garage on side and complete similar upgrade on house similar to family home - a granny flat to bring in extra income etc

Any advice on removing wifes name from joint mortgage with BOI - is it a simple step as not transferring ownership of property.

Many thanks

wench

What age is the wife? A short term would push the repayments up, such that she might not qualify for 3.5 time income.

3DataModem

edenbridge146 wrote: »

Hi folks

I was looking for some advice on Family Home etc

Basically 4 bed house is worth 500,000. Current tracker mortgage remaining is 75,000 with BOI the repayments are 700 a month and approx 7 years left.
There is a self contained granny flat on side of house which generates income of 800 a month and comfortably covers mortgage and insurances etc.
Its a HAP tenant and all above board with tax, BER and all documented.

Now the husband is retired, aged 67 and his occupational and state pensions collectively generate an income of 500 a week - 2000 a month - 24,000 a year
The wife is in employment earning 45,000 in public sector but looking to invest in another property for her pension etc as she is only in work force last 5 years

In order to 'free up' her affordability, they couple are looking at transferring the mortgage to husbands name solely but keeping both names on the deeds as its the family home. 'Kids' are 20 & 17.

Ideally the wife can get a mortgage in her own name for 3.5 times her salary
She has deposit of 50,000 so looking to purchase a house in region of 200k ironically with a garage on side and complete similar upgrade on house similar to family home - a granny flat to bring in extra income etc

Any advice on removing wifes name from joint mortgage with BOI - is it a simple step as not transferring ownership of property.

Many thanks

There is no “removing name from mortgage” ... the husband has to apply for a brand new mortgage himself with all that entails. Expect the bank to be extra scrutinising about this. Also, they won’t allow an owner (ie someone on deeds€ not to be a party to the mortgage.

phormium

Bank is unlikely to remove a name from the mortgage on the family home, most require family home mortgage to be in joint names, that is issue number one. Secondly if they were inclined to put it in one name then yes it is likely they would make you take out a new mortgage in a sole name thus losing tracker.

But a small mortgage of 75k should not have a major impact on affordability for a second mortgage especially when there is also some rental income to be taken into account from existing granny flat. The second house is being purchased as a buy to let so there should be some percentage of potential rental income taken into account there too. The underwriting is not as simple as a multiple of income as it would be for a home loan.

Wife can have new loan on BTL in sole name but the whole proposal needs to be underwritten, simply taking her name off existing mortgage, if that were possible, does not just make her like a single person with 45k income and just get a multiple of that, all aspects of the overall financial position need to be looked at.

edenbridge146

Wife is 47

Q&A

From the banks perspective I don't think they will assess a married couple separately. Too legally intertwined.

On the new mortgage front, unless you're planning on occupying the new property it would qualify as BTL rather than a owner-occupier mortgage. A BTL mortgage requires a higher deposits (30%). So that 50k will be closer to €167k. However, a BTL mortgage should be assessed more on the rental income than the wife's income.

Pkiernan

The wife also needs to consider that investment properties are not what they used to be.

Recipe for disaster now.
Not a suitable retirement fund for someone new to the game, or who isn't buying it for cash.

NinjaTruncs

Q&A wrote: »

From the banks perspective I don't think they will assess a married couple separately. Too legally intertwined.

On the new mortgage front, unless you're planning on occupying the new property it would qualify as BTL rather than a owner-occupier mortgage. A BTL mortgage requires a higher deposits (30%). So that 50k will be closer to €167k. However, a BTL mortgage should be assessed more on the rental income than the wife's income.

30% of 200k is not 167k. More like 67k.

Sarn

NinjaTruncs wrote: »

30% of 200k is not 167k. More like 67k.

What the poster meant was that with a deposit of 50k that would be 30% of 167k.

Q&A

Sarn wrote: »

What the poster meant was that with a deposit of 50k that would be 30% of 167k.

Spot on. The €50k could be leveraged up to a purchase price of €167k

The nuclear solution, and I mention it in jest only, is divorce and reconciliation. She'll need her own place but would be assessed separately. For second and subsequent purchasers the €50k only needs to cover 20% of the deposit so effectively increases the budget to approx €200k. Any remortgage by the (ex) husband would likely lead to loss of tracker. That's assuming a bank would be willing to grant a retiree a mortgage for the balance....
... I'm sure after all the hassle of sorting out a mortgage each they could fall back into each others arms but end up with a second property on a non-btl rate. :-P

But like I say nuclear!

edenbridge146

edenbridge146 wrote: »

Hi folks

I was looking for some advice on Family Home etc

Basically 4 bed house is worth 500,000. Current tracker mortgage remaining is 75,000 with BOI the repayments are 700 a month and approx 7 years left.
There is a self contained granny flat on side of house which generates income of 800 a month and comfortably covers mortgage and insurances etc.
Its a HAP tenant and all above board with tax, BER and all documented.

Now the husband is retired, aged 67 and his occupational and state pensions collectively generate an income of 500 a week - 2000 a month - 24,000 a year
The wife is in employment earning 45,000 in public sector but looking to invest in another property for her pension etc as she is only in work force last 5 years

In order to 'free up' her affordability, they couple are looking at transferring the mortgage to husbands name solely but keeping both names on the deeds as its the family home. 'Kids' are 20 & 17.

Ideally the wife can get a mortgage in her own name for 3.5 times her salary
She has deposit of 50,000 so looking to purchase a house in region of 200k ironically with a garage on side and complete similar upgrade on house similar to family home - a granny flat to bring in extra income etc

Any advice on removing wifes name from joint mortgage with BOI - is it a simple step as not transferring ownership of property.

Many thanks

If that granny flat is attached to the house I hope you are availing of the rent a room scheme and not paying tax, nor would any rules like needing a BER cert etc apply.

Jim2007

Q&A wrote: »

The nuclear solution, and I mention it in jest only, is divorce and reconciliation. She'll need her own place but would be assessed separately. For second and subsequent purchasers the €50k only needs to cover 20% of the deposit so effectively increases the budget to approx €200k. Any remortgage by the (ex) husband would likely lead to loss of tracker. That's assuming a bank would be willing to grant a retiree a mortgage for the balance....
... I'm sure after all the hassle of sorting out a mortgage each they could fall back into each others arms but end up with a second property on a non-btl rate. :-P

But like I say nuclear!

It's not a nuclear solution, it's impractical solution. The bank is not going to agree in any format to the a young healthy person of a loan agreement and be left with a 67 year old retiree as their sole recourse. The only way to get out would be to have the mortgage crystallise. And good luck to a 67 year old trying to get a short term loan to make that happen, followed by a mortgage.

edenbridge146

Franklin Wide Carp wrote: »

If that granny flat is attached to the house I hope you are availing of the rent a room scheme and not paying tax, nor would any rules like needing a BER cert etc apply.

Thank you so much for your advice - yes qualifies for the rent a room scheme as the flat is joined to main house. When letting to a HAP tenant the council required a BER cert which was provided

edenbridge146

Q&A wrote: »

From the banks perspective I don't think they will assess a married couple separately. Too legally intertwined.

On the new mortgage front, unless you're planning on occupying the new property it would qualify as BTL rather than a owner-occupier mortgage. A BTL mortgage requires a higher deposits (30%). So that 50k will be closer to €167k. However, a BTL mortgage should be assessed more on the rental income than the wife's income.

Thanks so much for your reply
In the short term - this investment property is going to be used for the children of the marriage as its close to college where they both will attend etc. Eldest is studying medicine and renting so its a 7 year degree and hes in year 1

So yes it is technically a BTL but BTL to adult children studying

Converting the granny flat on the new property and renting it out would make a huge dent in the repayments and the repayments on the mortgage would be cheaper than the 'dead money' that son has to pay in rent.
The son is currently paying 600 a month rent - and the mortgage on the investment @ 160k is 800 a month over 20 years

There is also a hospital close by so demand for rental properties as in the granny flat is high for health care workers etc

Q&A

edenbridge146 wrote: »

The son is currently paying 600 a month rent - and the mortgage on the investment @ 160k is 800 a month over 20 years

That repayment estimate seems a little too good to be true. For a mortgage of €160k over 20 years € 800 per month would imply a mortgage rate of 1.88%.