Frequently asked questions relating to Habito transfer of equity
- What if my application doesn't meet Habito lending criteria for a transfer of equity?
- My mother passed away last January leaving a unencumbered semi to me and my half brother equally. Having continues to reside at the property, there was a condition in the will saying the propertycould not be sold for 2 years after her death so he could continue to live there for a specified time frame. He now wants to remain in the premises 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 home loan in the conventional way to buy my share?
- Me and a friend got a joint mortgage with Habito on a apartment about a year ago. I am now thinking of purchasing a house by myself and my friend would like to buy me out. Once we have agreed a figure what happens next? Would there be any potential issue with Habito with him being responsible for the total loan rather than only half of it?
- Law month I split up with my partner of 18 years. I'm now living with my mum and dad and she wishes to remain in the flat and pay me off. What percentage am I entitled to. Is it half of the equity after discharging the mortgage with Habito? I assume proper valuations are required but I would like to be confident that I'm getting the best deal
- Can I apply to borrow a further advance from Habito as part of a Transfer of Equity?
- As things stand I have a joint Habito mortgage with my brother and am looking into the option of him assuming responsibility for the whole mortgage and subtracting myself from it, to enable me to buy a place with my fiance. The outstanding mortgage is in the region 250k, and the property value is in the region 600k. Is this a transfer of equity? Is stamp duty involved?
- Having been four years separated I have decided to relinquish up my share of the apartment to my husband who is refinancing with Habito. Could this transfer of equity be done inside 28 days?
Information that may be required from your conveyancer could ask regarding your Habito 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?
Has consent been obtained from Habito to the proposed transfer of equity?
If you are adding a person on to the title deeds how would you like to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Form.
Please confirm whether you are receiving any payment as part of the Transfer or Equity and from whom and give details of the amount?
Would you like us to draft you Declaration of Trust. If so are you willing to pay for the further fee (beyond the Transfer of Equity fee)?
We need you to provide the National Insurance Number(s) of all the new owners (required for submission of the Stamp Duty Land Tax Form)
General Advice to read in conjunction with the above Habito transfer of equity Advice :
Tax and Legal
There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Habito conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold properties
If your property is leasehold, provisions in the lease may require that you obtain the consent of the landlord. If such conditions are not strictly observed you may be in violation of the lease. This could trigger the freeholder taking enforcement action against you.
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 Habito 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 Habito 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 finalisation of the transfer of equity conveyancing.
If you do not keep up the payments on your mortgage with Habito your property may be repossessed.
Preparing the Transfer of Equity with a Habito Mortgage
When it comes to preparing the the Land Registry documents your conveyancer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.
If Habito 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 lawyer 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 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.