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Metro Bank transfer of equity: q and a’s

  • Am I best advised stop the direct debit for my mortgage with Metro Bank once a date for my remortgage and transfer of equity has been agreed?
  • Our mortgage broker has suggested using their lawyer for our Transfer of Equity plus remortgage with Metro Bank - won’t it be advisable to just instruct them?
  • How and when do I incur the Stamp Duty Land Tax payable for the transfer of equity in my property in my name alone which is happening simultaneously with a remortgage with Metro Bank?
  • What is the process for having someone removed from the deeds to a house if the home loan is with Metro Bank
  • Is it possible to transfer the equity held in my property with my Metro Bank home loan?
  • My friend and I got a joint mortgage with Metro Bank on a property about a year ago. I am now thinking of purchasing a flat on my own and my friend would like to buy me out. Assuming we can agree an amount what happens next? Is there likely to be any concerns with Metro Bank with him being solely liable for the total mortgage rather than only part of it?
  • Is stamp duty payable when it comes to an transfer of equity with a mortgage with Metro Bank?

Information that may be required from your conveyancer could ask in relation to your Metro Bank Transfer of Equity

Please confirm whether you are receiving any payment as part of the Transfer or Equity and from whom and provide details of the amount?

Please provide the details of anyone to be extracted from the property title?

Where you are intent on holding the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?

Please let us know of you wish us to draft you Declaration of Trust. If so are you happy to incur the further fee (beyond the Transfer of Equity fee)?

Please clarify where you are making any payment for the Transfer of Equity and to whom and notify us any such sums?

Has consent been obtained from Metro Bank to the proposed transfer of equity?

General Advice to read in conjunction with the above Metro Bank 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 Metro Bank conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold premises

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 your covenants under the lease. This could trigger 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 conveyancing solicitor will check with Metro Bank 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 Metro Bank 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 time of completion of the transfer of equity transaction.
If you do not keep up the payments on your mortgage with Metro Bank your property may be repossessed.

Preparing the Transfer of Equity with a Metro Bank Mortgage

When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Metro Bank 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.

Information contained within 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 Metro Bank transfer of equity