Frequently asked questions relating to First Direct transfer of equity

• Can I apply to borrow a further advance from First Direct as part of a Transfer of Equity?
• I am in the process of removing a name from a joint mortgage and the First Direct need me to use a conveyancer to carry out the conveyancing. Can you recommend a reasonably priced Witham conveyancer to deal with the transfer of equity? They need to be on the First Direct conveyancing panel.
• I am led to believe we would need at least AP1 and Transfer Deed. Is this true?
• My First Direct home loan we jointly entered into with ex, he is agreeable to come off the deeds and let me have the property. First Direct have consented to the transfer of equity to me solely. Will First Direct call my employer to verify my salary?
• My fiance and I have 50:50 shares in a investment property. I am a higher rate tax payer. Ideally I wish to complete a transfer of equity into her name in order mitigate tax on rental income. If First Direct are fine with this the legal fees are not prohibitive. What are the implications when we dispose of the property? As I would no longer be on the title documents am I giving up my CGT relief.
• My friend and I got a joint mortgage with First Direct on a property about a year ago. I am now thinking of buying a apartment on my own and my friend would like to buy me out. Once we have agreed an amount what happens next? Is there likely to be any issue with First Direct with him being solely liable for the total loan as opposed to only half of it?
• I am hoping to refinance my home in Blaenavon changing from Godiva Mortgages to First Direct. The apartment is jointly owned but I would like it to be in my sole name as and when I remortgage. My husband has agreed to this and is willing to transfer equity but neither of us want to get a second lawyer involved.

Questions that your conveyancing solicitor may ask in relation to your First Direct Transfer of Equity

Caveats to be read in further to 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 properties

If your property is leasehold, the lease may require that you have a license to do so from the landlord. If such terms are not adhered to you may be in breach of the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to 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 conveyancer 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 varies based on the market value of the property at the conclusion of the transfer of equity conveyancing.

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.

Information contained within 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.