Transfer of Equity

izools

OK.

So as my last thread detailed my mother needs to remortgage etc. and has a positive DIP from Nationwide. That's fine.

They have stipulated however that my father not be name on the mortgage account with the current lender, Birmingham Midshires.

Now, the situation is this:

Mother is 60 years old. Her mortgage balance is £58K and her endowment policy is worth £5K. Her BMS mortgage is interest only due to be repaid by March 2013. She is recorded on the Land Registry database as the sole proprietor of the property.

My father's name is still on the BMS mortgage. Nationwide won't complete with his name on the account despite the Deed being in mother's sole name; and her being the sole applicant.

Fine. Contacted BMS - they consider the removal of my Father's name from the mortgage account as a "Transfer of Equity"

Is it? I understood, possibly wrongly, that there would be no transfer of equity in so much as mother is already the sole proprietor of the property?

But that is by the by. BMS are happy to remove Father's name from the account BUT in order for them to do this, they want mother to demonstrate a repayment vehicle + the usual credit check, underwriting, etc.

Now, she either needs to prove that a) she can repay the mortgage within 20 months (when it ends) and remain on their SVR with no ERC or b) she can repay the mortgage within five years and be put on a new product with ERC.

OK. So she can't prove either - which is the whole point of getting a mortgage from Nationwide - they allow terms upto the applicant's 75 birthday wheras BMS don't allow mortgage terms to be extended past the applicant's 65th birthday.

I doubt an underwriter will consider a "Remortgage" as a suitable repayment vehicle would they? We'll send in Nationwide's DIP anyway but that doesn't really hold mutch water AFAIK.

It seems to be a catch 22 situation.

Any insight / ideas / suggestions?

holly_hobby

There isn't a transfer of equity (as Father isn't on the deeds), the removal of your father from the mge, is the release of a mortgagor (borrower).

Why do the current lender have to remove your father from the mge at all (before you move lender), as you have already said in the other thread that NWIDE have stated they are happy there isn't a tsf of equity forming part of the remortgage - as father isn't actually on the deeds.

A suitable repayment vehicle, would be an investment or asset back vehicle - could be another unencumbered property which will be sold to repay the debt, or a pension (Tax Free Cash element) ISA, bonds, gilts etc .. etc... etc...

I'm confused .. !!

Holly

izools

Me, too.

Nationwide seem to have some staff that understand and some that don't. It is very confusing for me, too. BMS have told mother that she also needs to find a solicitor (!?) to have Father released from the mortgage - they just don't seem to understand the difference between a release of a borrower and a transfer of Equity.

Urgh...

EDIT: I spoke to London & Country and the chap there also can't understand how N/Wide and BMS have so many staff who can't understand that no transfer of equity is involved.

I need a pint.

holly_hobby

I still don't understand why you are looking to get your father off the mge with your current lender before remortgaging to Nwide.

Now, if you were wanting to stay with your current lender, and get your father off the liability - I could understand why you are bothering with them - but you're not so (in a nice way ) don't understand where you are coming from with this ...

Holly

izools

It's because a lot of people at Nationwide can't understand that although his name is on the Redeption figure sheet from BMS he is not on the title deeds as per what the Land Registry says. They just can't tell the difference.