Cheapest method change ownership (+mortgage) without selling

smiley21_uk

Hi

My mother brought another property in her name only for my family and I to live in.
Its fixed rate mortgage and she already one year into the mortgage.
I am at stage where can afford to take the mortgage over (soley).
The only issue, i would like the property and mortgage to be in my name as I really do not want hassle in future with my mum name on the mortgage.
However, when i spoke to the borrower i had two options.

1) cheapest method is to Add my name to mortgage, which means I still get the same rate but incur admin charges (but she still remain on mortgage- so this isn't really an option)

2) or sell the property to me, which means higher rate on mortgage, stamp duties and etc. overall- too costly

Any advice?

p.s Sorry, if this is a stupid question.. can my wife be on the deeds if she is unemployed (housewife)?

Conrad

The only way is to transfer ownership. Of course that means you buying the property from her, which as you say will involve early repayment fees, Tax and so on.

Your wife can be on the deeds if unemployed.

Note where a partner is on the deeds, they must be on the mortgage, otherwise the Bank would have trouble repossesing an asset if a non - mortgage party has ownership of the asset.

smiley21_uk

Thanks

So if selling is the only options, let me throw in some figures as this getting more complex then I thought.

House was brought @ 175,000 back in MAY 2005 , it worth 185,000 to date
Mortage outstanding is 90k

so technically my mother wants to sell the property for 90k to me and not the market value.(as i denfinitely do not have 95k deposit)

Can she do this and would the mortgage company accept this?

Good news- I spoke to inland revenue and I will not be liable to stamp duty as it is below 125k threshold

Conrad

smiley21_uk wrote:

Thanks

So if selling is the only options, let me throw in some figures as this getting more complex then I thought.

House was brought @ 175,000 back in MAY 2005 , it worth 185,000 to date
Mortage outstanding is 90k

so technically my mother wants to sell the property for 90k to me and not the market value.(as i denfinitely do not have 95k deposit)

Can she do this and would the mortgage company accept this?

Good news- I spoke to inland revenue and I will not be liable to stamp duty as it is below 125k threshold

She can sell it to you for £90k. It can get tricky though as many lenders dont like such under value sales as the consensus is that there is great risk for them in this - I havent time to explain this here.

If you buy for £95000 and borrow £95000, most lenders will still view this as 100% borrowing.
Some who can consider lower ltv for calculating which mortgage schemes will apply are Victoria and Preferred mortgages.

Northern Rock might consider it, but its not straightforward.

Also when you come to get a mortgage illustration it can be a headache as the computer systems are'nt geared for unusual situations like this.

Take care, people get mislead in such situations. As an example a large 'Countrywide' (wink) estate agent told such clients all was ok and then the lender at the very last minute demanded a huge physical deposit.

You might want to try a specialist broker - make sure your EXACT (and I do mean exact) needs are confirmed in a REASON WHY LETTER, before you make any applications. This way if the broker messes up you will be covered.

thirty_dancing

Hi

I'm right in the middle of doing this myself, but used a FA to find the best deal as this is quite a complicated route to go down plus, following my divorce, I have an "interesting" credit history.

My parents' house is worth £180 000. I am taking out a mortgage of £122 500 but am buying the house (for the mortgage company's purpose) at £147 000 approx, with difference being a gifted deposit from my parents. My advisor designed the deal this way and has negotiated with the mortgage company and both sets of solicitors to ensure there are no problems or nasty surprises along the way. The total costs, including stamp duty are approx £2500.

Everything has been done by phone, email and snail mail as the FA is not local to me (actually, she is my parents' FA) and my parents live abroad. Having a good FA can make all the difference between getting what you want or not and how smoothly the whole thing goes so I would strongly advise you to find a FA and be totally honest with them.

smiley21_uk

Thanks for the quick response

ok- that does not sound to straight forward.

Is this an option- if i add my name on the mortgage and then remove my mother name at a later date, surely that is less complex.

danjberry

transferring your name on to do mortgage is a lengthy process but may end up a lot cheaper as no val, admin, redemption and stamp duty fees will need to be paid but you will have to pay the solicitor 2 sets of fees to add yourself and then when this is completed to remove your mothers name and add your wife at the same time. and the lender usually charges to agree to this. i would speak to the lender to see how much they charge and then call around a few solicitors to get a few quotes then weigh this up against purchasing it from your mum