Frequently asked questions relating to HSBC transfer of equity
- I am planning on removing a name from a joint mortgage and the HSBC require me to use a lawyer to carry out the legalities. Can you recommend a reasonably priced Witham
lawyer to deal with the transfer of equity? They need to be on the HSBC conveyancing panel.
- As things stand I have a joint HSBC mortgage with my cousin and am looking into the feasibility of him taking on the whole mortgage and subtracting myself from it, to enable me to buy somewhere with my partner. The remaining mortgage is approx 250k, and the property value is approx 600k. Is this a transfer of equity? Is land tax payable?
- I already have a home loan with HSBC and am keeping my existing mortgaging but wish to have have the equity transferred to my sole name so my ex won't be on it any longer. How long does the whole transfer of equity process take?
- I am filling out a HSBC transfer of equity form and have arrived at the section concerning debts etc. I do some debts that I have been reducing since 2009, I understand that they no longer remain my credit records. Do I need to set these out?
- I got divorced three years ago. Foolishly I never dealt with the change the ownership from the current 'joint' status to just in my name. I am ready to do that and so is she. Transfer-of-equity is needed. HSBC is willing to transfer the property and loan in my name (financial checks done). Does she need a solicitor?
- At what stage do I cover the costs of stamp duty due for the transfer of equity in my property in my name alone which is taking place at the same time as a switching mortgage via HSBC?
- HSBC have today agreed I can take over the home loan on my home. I previously applied for a transfer of equity but presumably there is a transfer of ownership at HMLR in addition?
Questions that your lawyer may ask in relation to your HSBC Transfer of Equity
Who will be responsible for the costs of the Transfer of Equity?
We need you to supply the National Insurance Number(s) of all the new owners (required for submission of the SDLT 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?
Please confirm the person to be removed from the title deeds will not reside at the property after completion of the Transfer of Equity?
Please give the details of anyone to be added to the property title?
Please state the names and ages of anyone over the age of 17, other than the owners, who will occupy the property with you
Important warnings to consider in in addition to the above HSBC transfer of equity Info :
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 HSBC conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold titles
Should the tenure of your property be leasehold, the lease may require that you obtain the consent of the landlord. If such terms are not adhered to you may be in breach of your covenants under 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 cases, 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 conveyancing solicitor will check with HSBC 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 HSBC 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 valuation of the property at the conclusion of the transfer of equity transaction.
If you do not keep up the payments on your mortgage with HSBC your property may be repossessed.
Preparing the Transfer of Equity with a HSBC 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 HSBC 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.
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.