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The Mortgage Business transfer of equity: q and a’s

  • My father died seven months ago leaving a unencumbered bungalow to me and my half brother in equal shared. Having continues to reside at the premises, there was a condition in her will saying the premisescould not be sold for three years after her passing so he could remain there for a while. He now wishes to remain in the premises beyond the specified 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 mortgage in the traditional way to buy my share?
  • Two years ago I purchased a flat without my partner's name on the deeds. My lawyer said it is due to the fact that she is not in the loan offer with The Mortgage Business. Is it possible for me to add her name on the title?
  • Is it sensible to stop the direct debit for my mortgage with The Mortgage Business as soon as a date for my remortgage and transfer of equity has been set?
  • I am disposing of my share of a flat in Woodside to my co-owners fiance, they are reapplying to The Mortgage Business. We are haggling as to who must cover the legal bill for the transfer of equity. Is this normally split or is one of us liable for the charges for?
  • After three years separated I have opted to transfer my interest in our flat to my husband who is refinancing with The Mortgage Business. Could this transfer of equity be completed within one month?
  • Can I apply to request a further advance from The Mortgage Business as part of a Transfer of Equity?
  • The mortgage broker has suggested using their lawyer for the Transfer of Equity plus remortgage with The Mortgage Business - Surely it’s better to just use them?

Information that may be required from your lawyer could ask about your The Mortgage Business Transfer of Equity

We need you to provide the National Insurance Number(s) of all the new owners (required for completion of the SDLT Form)

Where you are adding a person on to the property how would you like to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Questionnaire.

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 clarify if you are making any payment for the Transfer of Equity and to whom and specify the amount?

Who will be responsible for the costs of the Transfer of Equity?

Please let us know of you wish us to draft you Declaration of Trust. If so are you willing to pay for the additional fee (beyond the Transfer of Equity fee)?

Caveats to be read in supplemental the above The Mortgage Business 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 The Mortgage Business conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, provisions in the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such terms are not adhered to you may be in breach of the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

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 lawyer will check with The Mortgage Business 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 The Mortgage Business 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 finalisation of the transfer of equity transaction.
If you do not keep up the payments on your mortgage with The Mortgage Business your property may be repossessed.

Preparing the Transfer of Equity with a The Mortgage Business 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 The Mortgage Business 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 The Mortgage Business transfer of equity