Transfer Of Mortgage

chpspp

Hi everyone

Great forum. Was wondering if anybody has experience or advice to help with the situation I am in.

My wife and I have been living in our current property for 5 years we have been married for 4 years but the mortgage is in my wife’s name and mother-in-laws name. This was done as I was in temporary employment at the time and my wife had a low paid job. We are very lucky in that we have 65% equity in the property.

The question is that the fixed rate mortgage expired last year and since then we have been plodding along on the SVR of Halifax, what are my options to replace my mother-in-law on the mortgage.

Me and my wife have been initially accepted for a fixed rate mortgage at another provider but what are my options. I was under the impression that as the mortgage has technically finished its fixed term with Halifax that as long as the mortgage was cleared with Halifax there would be no need for me to assume the mortgage.

This would then just leave us with paperwork to change the deeds of the house that I understand can be obtained from the land registry. And obviously start a new mortgage with the new lender.

Am I on the right lines?

Any advice would be gratefully appreciated.

Wh05apk

Not as simple as filling in a form, and sending to land registry i'm afraid.

What you are looking at is called a transfer of equity, would be subject to usual app process/credit scoring etc, the cheapest way to do this would probably be to combine with a remortgage that way most of the legal fees would be covered.

Depending on amounts etc there may be a stamp duty liability.

chpspp

Thanks for the reply

Right am starting to get a grasp of this. The new mortgage is a remortgage so if I instruct a solicitor to carry out a transfer of equity would this be sufficient. Does anybody have a typical average price for this?

The property value is £200,000 so what are the stamp duty implications.

The decision really comes down to us wanting to fix our monthly costs and we are fortunate that we can get the best deals available due to the LTV% we have. The question is, is it me and the wife who has the new mortgage or does it make things simpler to keep it in the mother-in-laws name.

chpspp

Have just realised there may be CGT implications as well. Does this still hold true if no money changes hands as there is about £130,000 equity in the property. In terms of tax implications this could be a problem.

Any advice is appreciated.

CLAPTON

It's not a remortgage in any normal sense

it's a new mortgage with you and your wife as owners rather than your MIL and your wife as owners

potentially you will pay stamp duty on your half of the house

your MIL is liable to capital gains tax on the increase (i.e gain) in value of her half; she will have a cgt allowance of 10,100 to offset against the gain
what was the original vale of the property; what's its value now?

Wh05apk

You need to apply for a remortgage first, as the lender will need to be happy that you and your wife can now take this on yourself.

chpspp

Wh05apk wrote: »

You need to apply for a remortgage first, as the lender will need to be happy that you and your wife can now take this on yourself.

[FONT=&quot]Thanks for the advice. We have already applied and in principal have been accepted by more than one provider so have the option of choosing the better deal.

The property value is now £200,000 roughly and was £190,000 so may just fall below her liability.
[/FONT]

CLAPTON

chpspp wrote: »

[FONT=&quot]Thanks for the advice. We have already applied and in principal have been accepted by more than one provider so have the option of choosing the better deal.[/FONT]

[FONT=&quot]The property value is now £200,000 roughly and was £190,000 so may just fall below her liability.[/FONT]

she would only be liable for half the 'gain' i.e. 5,000 and also you can deduct buying/selling costs as well as 10,000 so no cgt payable