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Foundation Home loans transfer of equity: q and a’s

  • As things stand I have a joint Foundation Home loans mortgage with my cousin and am investigating the feasibility of him taking on the outstanding mortgage and removing myself from it, to enable me to purchase a place with my partner. The outstanding mortgage is approx 300k, and the property value is in the region 600k. Is this a transfer of equity? Is stamp duty payable?
  • My mum passed away seven months ago leaving a unencumbered bungalow to me and my half brother equally. Having continues to reside at the premises, there was a condition in her will specifying that the propertycould not be sold for 2 years after her passing so he could remain there for a prescribed period. He now wants to remain in the house beyond the prescribed period. We have considered a transfer of equity. Would I be right in thinking that we'd get a valuation then he'd get a mortgage in the traditional way to purchase my half from me?
  • I am selling my equity in flat in Hendon to the other co-owners fiance, they are reapplying to Foundation Home loans. We are in heated discussion as to who must pay the costs of the transfer of equity. Is this normally shared or is one party liable for the charges for?
  • Is it possible to apply to request a further advance from Foundation Home loans as part of a Transfer of Equity?
  • I recently purchased a flat without my wife's name on the deeds. My conveyancer claimed it is due to the fact that she was not in the mortgage with Foundation Home loans. I'm wondering is there any way that I can put her name on the documents at HMLR?
  • I acquired a flat with a friend in 2010 Since purchasing the property, we have both got married. We are now seeking to do a transfer of equity so my name comes off the Foundation Home loans mortgage. There is a meaningful difference between the 'rightmove estimate' and what the property would sell for currently. Can you offer any advice?
  • I jointly own a house in Friern Barnet , with a Foundation Home loans mortgage with my ex husband. He and his new partner are going to buy me out. We had the go ahead from Foundation Home loans to substitute my name with hers. The transfer of equity needs to be completed by a conveyancing solicitor for Foundation Home loans (apparently). In order to save fees can I deal with the Land Registry change?

Information that may be required from your conveyancer is likely to ask about your Foundation Home loans Transfer of Equity

Please clarify where you are providing any payment for the Transfer of Equity and to whom and disclose any such sums?

Where you are adding someone on to the property how would you like to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Questionnaire.

Is the transfer of equity subject to a court order? If yes please supply a copy

Have you approached Foundation Home loans to obtain consent to the Transfer of Equity

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

Please provide a copy of your National Insurance Number?

Important warnings to consider in supporting the above Foundation Home loans 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 Foundation Home loans conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

Should the tenure of your property be leasehold, provisions in the lease may have a requirement for notices to be served and that you obtain the consent of the landlord. If such conditions are not complied with you may be in violation of your covenants under 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 lawyer will check with Foundation Home loans 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 Foundation Home loans 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 valuation of the property at the conclusion of the transfer of equity conveyancing.
If you do not keep up the payments on your mortgage with Foundation Home loans your property may be repossessed.

Preparing the Transfer of Equity with a Foundation Home loans 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 Foundation Home loans 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 conveyancer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided on this webpage is for general information and only applies to England and Wales. It should not be regarded as 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 Foundation Home loans transfer of equity