Frequently asked questions relating to Virgin transfer of equity
- My friend and I got a joint mortgage with Virgin on a property a couple of years ago. I am now thinking of buying a property by myself and my friend would like to buy me out. On the basis that we can settle on an amount where do we go? Is there likely to be any issue with Virgin with him being solely liable for the total loan rather than only part of it?
- When it comes to transfer of equity conveyancing involving a remortgage with Virgin should I be charged VAT on the following: (1) HMLR fee on the transfer of equity (2) Pre - completion search fee (3) SDLT E submission on the transfer (4) Bank TT fee
- Is it sensible to cancel the direct debit for my mortgage with Virgin as soon as a date for my remortgage and transfer of equity has been agreed?
- My father died early last year leaving a loan-free semi to me and my half brother 50:50. Having continues to reside at the property, there was a provision in her will specifying that the premisescould not be sold for 2 years following her passing so he could remain there for a while. 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 should get a valuation then he'd get a home loan in the traditional way to acquire my equity?
- As things stand I have a joint Virgin mortgage with my brother and am looking into the feasibility of him taking on the outstanding mortgage and removing myself from it, to enable me to buy a place with my partner. The outstanding mortgage is about 250k, and the property value is in the region 450k. Is this a transfer of equity? Is stamp duty payable?
- I am planning on removing a name from a joint mortgage and the Virgin require me to use a conveyancer to carry out the paperwork. Can you recommend a reasonably priced Ampthill conveyancing solicitor to deal with the transfer of equity? They need to be on the Virgin conveyancing panel.
- I am transferring my equity in flat in Hendon to the other co-owners husband, they are reapplying to Virgin. We are debating as to who must cover the legal bill for the transfer of equity. Is this normally split or is one party liable for the charges for?
Information that may be required from your conveyancing solicitor is likely to ask regarding your Virgin Transfer of Equity
Please list all persons who occupy the property, their respective ages and relationships to you.
Has consent been obtained from Virgin to the proposed transfer of equity?
Please provide the details of anyone to be extracted from the title deeds?
Please give the name(s) and addresse(s) of anyone to be added to the property title?
Please confirm whether you are receiving any payment as part of the Transfer or Equity and from whom and provide details of the amount?
Would you like us to draw up a Declaration of Trust. If so are you willing to incur the further fee (beyond the Transfer of Equity fee)?
Information to consider in further to the above Virgin 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 Virgin conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold properties
If your property is leasehold, the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such conditions are not complied with you may be in breach of the lease. This could potentially result in 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 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 lawyer will check with Virgin 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 Virgin 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 market value of the property at finalisation of the transfer of equity transaction.
Your property may be repossessed if you do not keep up repayments on your mortgage with Virgin.
Preparing the Transfer of Equity with a Virgin 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 Virgin 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 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.
