Recently asked questions relating to Paratus transfer of equity
- Paratus yesterday agreed I can take over the home loan on the house. I have applied for a transfer of equity but is this a transfer of ownership at the Land Registry in addition?
- I am hoping to refinance my maisonette in Rye
switching from Virgin Money to Paratus. The home is jointly owned but I would like it to be in my name only when I remortgage. My husband is OK with this and is willing to sign a form but neither of us want to incur lawyer fees.
- I currently have a joint Paratus mortgage with my cousin and am looking into the option of him taking on the whole mortgage and subtracting myself from it, to enable me to purchase somewhere with my partner. The remaining mortgage is in the region 250k, and the property value is in the region 600k. Is this a transfer of equity? Is stamp duty due?
- Have recently split up with my wife of thirty years. I'm now back with my parents again and she wishes to stay in the flat and pay me off. What percentage am I entitled to. Is it half of the equity after paying off the mortgage with Paratus? I assume proper valuations are required but I really need to be sure that I'm getting the best deal
- What are the average conveyancing costs are for a transfer of equity? I'm in the process of remortgaging - new loan with Paratus - and have been quoted £350 including VAT by Paratus's appointed lawyer, Is this is a good price or not?
- What if my application doesn't meet Paratus lending criteria for a transfer of equity?
- My divorce has gone through as is the consent order. Now I must address the transfer of equity for the property and the Paratus home loan. I have asked Paratus for the transfer of equity forms. What are my next steps?
Questions that your lawyer may ask in relation to your Paratus Transfer of Equity
If you are adding someone 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” Questionnaire.
Please give the details of anyone to be extracted from the property title?
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?
Who will be responsible for the costs of the Transfer of Equity?
Please provide the details of those who jointly own the premises with you?
Have you approached Paratus to obtain consent to the Transfer of Equity
Information to consider in in addition to the above Paratus transfer of equity information :
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 Paratus 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 have a license to do so from the landlord. If such restrictions are not strictly observed you may be in breach 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 conveyancer will check with Paratus 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 Paratus 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 conveyancing.
Your property may be repossessed if you do not keep up repayments on your mortgage with Paratus.
Preparing the Transfer of Equity with a Paratus 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 Paratus 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.