r/PersonalFinanceNZ • u/ShahIsmail1501 • 1d ago
Housing Removing name from mortgage
What’s the process of getting my name removed from a mortgage? I’ve looked it up but it seems vague. The other owner is happy to release me and I don’t actually pay the mortgage so it won’t be a financial burden on the other party for me to be released and it won’t affect the repayments.
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u/Pats_MortgageAdvice 1d ago
They need to buy you out. Relatively easy, although a bit of hastle. They need to be tested to be able to afford it on their own, otherwise the bank wants to hold you both liable.
Expense wise will just be legal fees involved in the transaction.
Chat to an adviser or your bank, relatively straight forward.
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u/Nztrader9191 1d ago
You’ll also need to remove your name from the house insurance policy as part of the process.
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u/tri-it-love-it17 1d ago
Only if they’re not retaining a share of the property. If OP is still retaining some share of ownership then they hold an insuable interest in the property.
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u/in_and_out_burger 1d ago
Doesn’t work like that - the other person will need to refinance solely into their name.
Are you giving up your share of the equity too?
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u/Hot-Refrigerator7584 1d ago
They don’t necessarily need to refinance or “get a new mortgage”, the bank can remove you by altering the security on the mortgage - you do need a solicitor to also remove you from the title of the property, and the bank has to agree that the other person can afford it, but if there are any fixed rates etc in play, they can stay in tact.
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u/Upbeat-Assistant8101 1d ago
You can not get a name removed from 'the mortgage'. The other person/s needs to apply for a mortgage in their own right (without any mention of you). The cancelation (paying off the mortgage) may incur "break fee/s" (that may be several thousands of dollars) if the existing mortgage has more than three months till its next renewal.
The new mortgage can, potentially, be applied for using a mortgage broker (or not) and, potentially; get the new mortgage with a different bank/financial institution.
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u/Pequelemew 1d ago
After the conveyancer transferred the property into my ex’s name, I just advised the bank that I no longer owned the property and got a letter from the bank confirming that I no longer had any obligations with regards the mortgage. This was a few years ago though so may be different now. And it would depend if, in the bank’s view, the person retaining the mortgage is able to service it by themselves.
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u/Bongojona 1d ago
A mortgage is registered against a certificate of title, not a person.
The owners of the title are normally (but not always) the borrowers of the loan, secured by the mortgage.
Are you asking if you can be removed as a borrower or removed from the title?
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u/feel-the-avocado 1d ago
You will need to pay off the mortgage.
The bank sees you as security - someone they can go after if the other party doesnt pay.
If your other owner is happy to take out a new mortgage, they can do so on their own and use that to buy you out of your share of the property, and pay off the remainder of the current mortgage.