Magellan Homeloans transfer of equity: q and a’s
- I currently have a joint Magellan Homeloans mortgage with my step-brother and am investigating the possibility of him assuming responsibility for the whole mortgage and removing myself from it, so as to enable me to purchase somewhere with my soon-to-be-wife. The outstanding mortgage is approx 300k, and the property value is about 450k. Is this a transfer of equity? Is stamp duty involved?
- My divorce has gone through as is the consent order. Now I need to deal with the transfer of equity for the property and the Magellan Homeloans mortgage. I have called Magellan Homeloans for the transfer of equity application. What happens next?
- I got divorced in 2010. For some reason I never dealt with the transfer ownership from the current 'joint' status to my name alone. I now plan to deal with it and there are no objections. Transfer-of-equity is needed. Magellan Homeloans is willing to transfer the full equity in my name (financial checks done). Does my ex need a conveyancer?
- Am I best advised stop my mortgage payments with Magellan Homeloans as soon as a date for my remortgage and transfer of equity has been set?
- My father passed away last March leaving a unencumbered bungalow to me and my brother in equal shared. Having continues to reside at the house, there was a provision in the will saying the propertycould not be sold for 2 years after her passing so he could continue to live there for a specified time frame. He now wishes to remain in the premises beyond the specified period. We have discussed a transfer of equity. Would I be right in thinking that we'd get a valuation then he'd get a mortgage in the conventional way to acquire my share?
- Magellan Homeloans yesterday agreed I can take over the mortgage on the house. I have applied for a transfer of equity but is this a transfer of ownership of the title deeds on top?
- Do I need legal advice when doing a transfer of equity where the mortgage is to remain with Magellan Homeloans?
Examples of information requested in a conveyancing solicitor form relating to Magellan Homeloans Transfer of Equity
Where you are going to hold the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?
Have you approached Magellan Homeloans to seek consent to the Transfer of Equity
Please provide a copy of your National Insurance Number?
Has one of the registered owners died? If so please supply us with a copy of all the relevant documents e.g. the will, death certificate etc..
Please give the name(s) and addresse(s) of anyone to be added to the title deeds?
Who will be responsible for the costs of the Transfer of Equity?
General Advice to read in supporting the above Magellan Homeloans transfer of equity Advice :
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 Magellan Homeloans conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold properties
Should the tenure of your property be leasehold, the lease may have a requirement for notices to be served and that you have a license to do so from the freeholder. If such restrictions are not strictly observed you may be in violation of the lease. This could potentially result in the freeholder taking enforcement action against you.
If the transfer of equity is made pursuant to 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 Magellan Homeloans 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 Magellan Homeloans 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 Magellan Homeloans your property may be repossessed.
Preparing the Transfer of Equity with a Magellan Homeloans 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 Magellan Homeloans 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 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.