Q – Ten years ago, my mother who is now 69 guaranteed my mortgage – I was somewhat short of the required income level then but the bank insisted she be put on the mortgage. Even with a recent salary reduction, I am nearly at the level where my own income now is sufficient for the mortgage while I also have savings that could reduce my mortgage to even more acceptable levels. I now want to take my mother off the loan while my mortgage is also on a fixed interest rate with my bank. What’s the best way to proceed with this ? John – Clonsilla Dublin 15
A – Hindsight is a wonderful thing John – accepting a 59 year old mother to guarantee a son’s 30+ year home loan should never have been allowed in the first place. You have a number of steps to take :
- See your lender and bring your last 2 years’ income certs plus your last 3 pay slips and ideally an up to date status employment note from your employer…
- First you should request that, based on your current income and job security, your mortgage be placed solely in your name and that
- Your mother’s name be removed from the mortgage deed.
- If they deem your income insufficient to warrant the request, ask them what level of borrowing would satisfy them based on your current income that would allow your mother’s guarantee to be waived ?
- If you have savings, offer to either pay off the amount to the level they desire. They can then attach a lien as security for the mortgage until such time as the reducing loan balance does nt need that deposit.
- If you are allowed to repay without penalty, it will also reduce your monthly mortgage pro rata. Better for your cash flow.
- You will also need to brief your solicitor to make the necessary legal changes.
Best of luck and well done your Mum !