Can I transfer a mortgageto someone else?

I have an interest only mortgage with the Woolich. Due to a change in circumstances Is this possible or should I consider transferring the house over to them? I a bit confused about the best way of transfer either over

Replies

  • opinions4uopinions4u
    19.4K Posts
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    You haven't explained clearly what you want to do.

    Are you trying to sell the house to somebody else, or hand the keys back to the lender because you can't afford things?

    Clarify this, and also:

    - explain what you mean by "change of circumstances"
    - tell us how much you owe
    - tell us how much the house is worth

    This may help you to get some more constructive information.
  • edited 1 July 2009 at 10:37PM
    cammie71cammie71 Forumite
    2 Posts
    edited 1 July 2009 at 10:37PM
    Thanks for your guidance, my first time posting here so am unsure of what information to put.

    I am not handing the keys back to the lender, but looking into my parents and brother taking over the mortgage as it is interest only tracker non fixed at present and a good mortgage deal no longer offered by the Woolich.

    The property is worth approx £235,000 in current market and I owe £135,00.

    Due to ill health, I may need to give up work but am unable to get mortgage protection on health grounds as they are pre-existing conditions and after an exhaustive search no-one will cover me.

    Should I have to give up work, I will need to live with relatives and my parents and brother would take over the property and rent it out and keep it as an investment. They helped me buy out my ex husband 3 yrs ago and I owe them that money back, therefore I would prefer it to be in their names should anything happen they can then decide to sell if they want

    We would like to have it sorted out now in case I do have to give up work, there would be stress trying to sort it out later.

    Help this info helps.

    To be honest I am not sure of the best way of transferring over to parents and brother other than selling to them. Hence making enquiries and maybe someone can advise other options I may not be aware of
  • edited 2 July 2009 at 5:45AM
    opinions4uopinions4u
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    edited 2 July 2009 at 5:45AM
    cammie71 wrote: »
    Thanks for your guidance, my first time posting here so am unsure of what information to put.
    Thanks for expanding on the detail. It's not a case of being nosey, but about trying to best understand your circumstances in order to give the best help.
    Due to ill health, I may need to give up work but am unable to get mortgage protection on health grounds as they are pre-existing conditions and after an exhaustive search no-one will cover me.
    I don't think you will find anybody who will cover you, for obvious reasons.
    Should I have to give up work, I will need to live with relatives and my parents and brother would take over the property and rent it out and keep it as an investment. They helped me buy out my ex husband 3 yrs ago and I owe them that money back, therefore I would prefer it to be in their names should anything happen they can then decide to sell if they want
    Okay, what follows may give you some ideas as to what to do next, but ultimately you will need to talk to Woolwich.

    - give serious consideration to selling the property to release the equity in it. As an investment it looks like all your/their eggs in one basket, which is a high risk approach. Not to mention the responsibilities of looking after a tenant. Would the rental income be able to cover the mortgage (especially if the mortgage was at a higher rate)? While the housing market is showing signs of stabilising, there is little evidence to suggest investors are going to make decent capital gains over the next couple of years (and don't forget capital gains tax if they do realise a gain).

    - if you have made a final decision to keep the property, talk to the Woolwich about what your options are short term and long term.

    - they may be open to issuing a consent to lease (which is effectively short term permission to let the house) but are likely to charge a fee for this. They may also insist on a change to your mortgage interest rate. Different lenders have different rules (at different times!).

    - they may, given your circumstances, be prepared to add the names of other families on to the mortgage if you stay on, which may protect your rate in the short term. But if they agree to converting the mortgage to a buy-to-let basis (which they are not obliged to do) I would be gobsmacked if they let you keep the rate.

    - in my mortgage lending days I can only once remember being able to remove a sole borrower from a commitment and transfer it over to other family members. There were exceptional circumstances, but the family were intending to occupy, there was no renting involved. You can ask the question to Woolwich, and I'd play on your exceptional circumstances, but I'd be surprised if they agreed to it. If they don't agree to it, your family are basically seeking out a new buy-to-let mortgage, possibly with another lender and whatever rates are currently available. One for a local whole of market mortgage adviser and expect some quite hefty fees.

    I'm sorry I've not given you a definitive answer.

    Talk it through with your family and then have a word, informally, with the Woolwich to find out what doors are open and which ones are closed.

    If it was me I'd sell up.

    Good luck with everything at what must be a rather difficult time.
  • No such thing as transfering a property. Your relatives will actually need to buy it from you and obtain thier own financing.

    The applicants will need usualy nto demonstrate they have sufficient earned income. Some B2L lenders wont entertain first time landlords.

    Deposit might be formed by the existing equity but be careful as some lenders / brokers will not input this into the front end online application so the programme will 'assume' the despoit is from cash and only later will an underwriter pick this up and may then cause a decline.

    Northern Rock are relatively easy on criteria but last time I checked thier rates were highish.
  • itsakidsworlditsakidsworld Forumite
    555 Posts
    Part of the Furniture 100 Posts Combo Breaker
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    A simple way forward if possible which should not complicat things is ask the Woolich if they accept "a deed of gift". What this is, is your effectively giving your family a £100,000 gift(which is the balance of value after mortgage) or there abouts with costs. There would be legal issues here but a good law firm will take care of these for you.

    If they will not do this then find a lender who will. Obviously your family will have to meet financial criteria to proceed.

    If you do not have or want any cash out of the property then this could be an option. If you want some cash then reduce the dee of gift and receive a cash lump sum which would come by way of the lender increasing the loan as a new loan to your family, or using another lender.

    Just an opinion and hopefully another solution in what must be difficult times for you.

    The best of luck in your choice.
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