name on mortgage but not on title deeds - pls advise

mdd

Hi All,

If anyone can assist on this confusing matter I would be gratefull.

6 years ago we purchased our council flat as part of a Right to Buy. The property was registered to our mother. I took the mortgage on my own name as she does not work and is a house wife. HSBC completed the transaction successfully and I have been paying the mortgage ever since. The title deeds are still under our mothers name as well as the land registry docs. I think HSBC were the only bank at the time that allowed another family member to take on a mortgage like this. Now that we want to move to another lender, its causing complications as they are quering about the mismatch in names between our mother and mine(the mortgage holder).

The flat is worth £280. It has £98k remaining on the mortgage.
I spoke to a solicitor and she advised the best option is a transfer of equity or have it as joint. What is the best way to handle this? We want to avoid inheritance tax and stamp duty.

Any help is much appreciated.

thanks
M:)

CloudCuckooLand

Suspect you will need a joint mortgage.

I doubt a lender will want to have a mortgage in your just name with your mother having a lifetime right to reside - which is what her solicitor should ensure she has, to protect her future.

mdd

thanks for the reply.

Even if our mother doesnt work and has no income?

CloudCuckooLand

Yes. The joint nature of the product would take your income into account, much as it does now. Same effect. Just a second name.

Assuming she has no debts, poor credit history to hinder the application.

mdd

so technically we dont need to do any transfer of equity or any other legal work right? i have fears that i might incur inheritance tax plus stamp duty. Instead youre saying just get a joint mortgage application going? I already have an application approved and pending under my name so I guess I can add our mother to the application? (she has no bad credit history - clean as a whistle)

Senior_Paper_Monitor

Yes - mother will have to be on mortage if she is to own all or part of the property. This may (depending on age etc cause you some difficulty identifying an approriate replacement lender.

With regard the current situation - the original conveyancer is totally culpable.

First question is - were you resident in the property at the time of sale (and 12 months - I think from memory) before ?

This has no real impact now, but might explain what the conveyancer did (and how they would react to a claim against them to rectify).

Be careful about rectifying before the new mortage application rather than as part of it - your would then have been an owner for lesss than six months and have further difficulty obtaining a lender.

If you are transferring half of the property to you (or using tenants in common) you will be incurring stamp duty (and you may have a valid claim against the original conveyancer for this) as 50% of value is approximately £140K and exceeds the base limit. You could avoid this by using tenants in common and you obtaining 45% of the property (staying under the limit).

At the apparent values involved, and assuming no other major assets etc, there are probably no inheritance tax issues - but if there are further major assets/wealth involved then you should take appropriate advice.

There are some serious issues in sharing ownership on what is really yoru mother's home (all dependant upon your own finanacial and personal position) and you should take advice on wills and probably the use of trusts in protecting the property for her lifetime use in tehe evnt of the co-owner (you) having fianncial or marital issues (or predeceasing her).

You certainly need professional mortage advice here (as the application will need to be carefully stage managed) and probably some additional legal advice.

mdd

Hi

We moved into the property as a family in 1994 and purchased it in 2004. We all still reside under the same roof.
Our mother is 58 years old so will lenders still see her as a valid applicant?

With regards to the equity transfer I thought there would be no stamp duty as the remaining balance is £98k

"Be careful about rectifying before the new mortage application rather than as part of it - your would then have been an owner for lesss than six months and have further difficulty obtaining a lender." the application has pretty much been accepted - we are just waiting for a valuation to come by but not sure if the ebst option is to add our money to the application at this stage in time

Senior_Paper_Monitor

If you proceed with a remortage involving putting you on the deeds (as a result of the mortage) and use 'joint tenancy' or a share representing a value greater than the stamp duty limit under a 'joint tenancy' you will be liable for stamp duty at the point of equity transfer.

Sorry, I don't understand your question in red !

On the information available to date I believe you should be attacking the original conveyancer big time.

mdd

sorry I mistyped that really badly - it should have been as follows:
the application has pretty much been approved in principle. We are just pending the valuation results. Before the application is fully processed I am not sure if its appropriate to add our mother as a joint application at this stage

Conrad

Mums age will limit the term to her 65th birthday for some lenders so check up front.

You want to remortgage to get a better deal I think. This will involve adding you to the deeds.

Watch out for cerftain anonalyies such as those lenders offering free fees to REMORTGAGE, but nthier systems wont have been designed with a case like yours in mind so make sure they confirm the free fees even though you are not on the mortgage.

This case may be one for a small Building Society. A large lender with reigd online systems will throw up all sorts of problems as you will see once you try and complete a full application as the questions wont make sense for people with your situation.

Good luck

mdd

Thats great. Thank you for everyone's input on this.