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First Direct transfer of equity: q and a’s

  • How do I go about adding or removing names (transfer of equity) to or from my First Direct mortgage account?
  • What legal advice do I need when doing a transfer of equity where the home loan is to remain with First Direct?
  • Online reading suggests that solicitors are more expensive than conveyancers for transfer of equity conveyancing. Am I better of using a conveyancer or a solicitor if I need to be transferring equity and at the same time remortgaging with First Direct
  • I am transferring my share of a house in Hendon to the other co-owners husband, they are reapplying to First Direct. We are in heated discussion as to who should cover the charges for the transfer of equity. Is this normally split or is one party obliged to cover the charges for?
  • I currently have a joint First Direct mortgage with my step-brother and am looking into the feasibility of him taking on the whole mortgage and extracting myself from it, so as to enable me to purchase a property with my soon-to-be-wife. The outstanding mortgage is in the region 175k, and the property value is about 500k. Is this a transfer of equity? Is stamp duty due?
  • What are my options where I am dissatisfied with the conveyancer who undertook my transfer of equity transaction?
  • My current mortgage is with First Direct. Can I transfer equity to someone under eighteen years old?

Examples of questions in a conveyancing solicitor form relating to First Direct Transfer of Equity

Please provide the details of anyone to be added to the property title?

Who will be responsible for the costs of the Transfer of Equity?

Please confirm the person to be removed from the title deeds will not reside at the property after completion of the Transfer of Equity?

Would you like us to draw up a Declaration of Trust. If so are you willing to pay for the further fee (beyond the Transfer of Equity fee)?

Please inform us where you are making any payment for the Transfer of Equity and to whom and specify the amount?

Please provide the name(s) and addresse(s) of anyone to be removed from the title deeds?

Important warnings to consider in supporting the above First Direct transfer of equity Questions and Answers :

Tax and Legal

There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the First Direct conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, the lease may require that you obtain the consent of the landlord. If such restrictions are not strictly observed you may be in violation of your covenants under the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of an Order of the Court, then Insolvency Indemnity Insurance is not required. In other situations, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your lawyer will check with First Direct This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as First Direct or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy is dependent on the market value of the property at the conclusion of the transfer of equity conveyancing.
If you do not keep up the payments on your mortgage with First Direct your property may be repossessed.

Preparing the Transfer of Equity with a First Direct Mortgage

When it comes to preparing the the Land Registry documents your conveyancing solicitor should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If First Direct is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Content on this webpage is for general information and only applies to England and Wales. It does not constitute advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.


Frequently asked questions relating to First Direct transfer of equity