Transfer of equity with existing mortgage

If you want to transfer a property subject to a mortgage, you will either need the lender’s consent or you will need to remortgage. We explain how a transfer of equity with an existing mortgage works and look at the options.

At Lockings Solicitors, our experienced property lawyers can represent you in a property transfer, ensuring you understand the implications and that the transaction is in your best interests. We are also approved to represent all major high street lenders in remortgages.

We have been helping clients with mortgages and property transfers in East Yorkshire and beyond for many years. We have the experience to deal with any complications promptly and effectively and have a reputation for efficiency. We offer a modern, responsive service and we will ensure that you are kept up to date with progress.

We offer a FREE initial chat so that you can ask us any questions you may have about remortgaging and transfer of equity. Call us on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and represent clients across the East Yorkshire area and beyond.

What is a transfer of equity?

Transfer of equity refers to transferring the interest in a property. This is usually from joint names to a sole name or vice versa.

When is a transfer of equity needed?

A transfer is often carried out when there is a change in personal circumstances. This could be moving in with someone and putting a property into joint names with them or separating or divorcing and transferring a shared home into one party’s name.

Can I do a transfer of equity with mortgage in place?

If the property is subject to a mortgage, then the lender’s consent is always needed. If you want to put the property into joint names, you will usually need to apply for a new mortgage with the new joint owner.

Should you want to transfer a property from joint names into your sole name, the lender will need to be satisfied that you can maintain the payments yourself before they release the other party from their obligations.

If they will not do this, it may still be possible to remortgage in different terms to reduce the amount of the payments. For example, you may be able to take out a mortgage over a longer period of time. Alternatively, if you know that you will be able to pay off the capital in the future, such as when an investment matures, an interest-only mortgage could be an option.

How do I transfer equity in a property?

You should ask a solicitor to represent you in dealing with the transfer to ensure that your interests are protected and that the transaction is right for your circumstances.

If you would like us to deal with the transfer on your behalf, we will start by obtaining a copy of the title deeds. If the property is being transferred to you, we will advise you on the legal title, if you are not already an owner.

We will liaise with the mortgage lender as necessary. If you will be taking out a new mortgage, we will provide you with advice on the terms and conditions and carry out the due diligence work that the lender will need, including checking the legal title, obtaining a range of property information and either requesting searches or putting search indemnity insurance in place.

If someone is being removed from the mortgage, we will discuss the implications of this with you and ensure that your lender has provided the consent we need to enable us to go ahead with the transfer.

At the same time, we will draft the transfer document to be signed by you and any other owner, ready for completion.

If you are remortgaging, we will obtain a redemption statement from your existing lender and ensure that you have a financial statement showing the amount we will need from you to complete or, alternatively, the amount that will be payable to you on completion.

Once everyone is ready to go ahead, we can order mortgage funds, if you are taking out a new mortgage. On the day of completion, the transfer will be dated and, where necessary, your former mortgage will be paid off.

Following completion, the transfer will be registered at the Land Registry.

Transfer of equity to joint names

If you are transferring a property into joint names, you will need to decide what type of joint ownership you want. There are two options:

• Joint tenants; and
• Tenants in common

Joint tenants explained

When you own a property as joint tenants, you both own the whole property together. Neither of you holds a defined share of the property and if one of you were to die, the other would automatically own the whole property. This means that you cannot leave any part of the property to someone else in your Will.

Tenants in common explained

If you own a property as tenants in common, you will both own a defined share of the property, for example, a 50:50 split or an unequal amount such as 25:75. When the property is sold or transferred, you will be entitled to your specified share.

Should one of you die, that person’s share will pass under the terms of their Will. If they do not leave a valid Will, it would be inherited by those entitled to it under the Rules of Intestacy. This means that the person remaining in the property might have to leave if they could not afford to buy out the beneficiary.

If you own a property with someone as tenants in common, it is important to ensure that you both have a valid Will in place, particularly if you are not married. This is because a cohabiting partner does not receive anything under the Rules of Intestacy.

How long does a transfer of equity with existing mortgage take?

If you need your lender’s consent to a transfer of equity or you are applying for a new mortgage, the transfer may take six weeks or more, depending on the lender’s current workload. If you are ready to go ahead with a transfer, feel free to call us and we can start on the legal work that needs to be carried out so that once your lender provides their approval or the mortgage offer, we are ready to proceed.

Contact our East Yorkshire remortgage and transfer of equity solicitors

You can ring us for a FREE initial chat on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and represent clients across the East Yorkshire area and beyond.