Advice please - Transfer of ownership

yumyums

Hi all, I was hoping for some advice on the following problem.
My husband and I own a house outright and we are trying to remortgage to release some equity. I am not a permanent UK resident yet so the lender wouldn't allow me to be on the mortgage and we were ok with this.
We've just had the mortgage offer which says the property needs to be transferred into my husband's name alone and any legal or equitable interest of any other person needs to be extinguished. I don't understand why they would insist on this. I'm annoyed that it got to this stage before we were made aware of this as we've already incurred costs for the valuation and the solicitor.
Going to speak to them tomorrow but until then it will be stressing me out and I wanted to know if anyone has encountered anything similar.
Thank you very much for any advice

BitterAndTwisted

Your legal or equitable interest cannot be extinguished as you currently have none because you are not a permanent UK resident yet. This is in relation to your formal ownership only where it relates to the mortgage and loan repayments and has nothing to do with any consequent issues due to your marriage.

Look at it this way: should you separate or divorce or suffer any other calamity you will not be responsible for settling the mortgage on the property, only your husband will be.

Once the mortgage is paid off you can arrange for the property to be co-owned, either by becoming joint-tenants or tenant-in-common. This just requires a few forms to be completed and filed with the Land Registry

yumyums

BitterAndTwisted wrote: »

Your legal or equitable interest cannot be extinguished as you currently have none because you are not a permanent UK resident yet. This is in relation to your formal ownership only where it relates to the mortgage and loan repayments and has nothing to do with any consequent issues due to your marriage.

Look at it this way: should you separate or divorce or suffer any other calamity you will not be responsible for settling the mortgage on the property, only your husband will be.

Once the mortgage is paid off you can arrange for the property to be co-owned, either by becoming joint-tenants or tenant-in-common. This just requires a few forms to be completed and filed with the Land Registry

Thanks bitterandtwisted. Thing is, I'm already on the deeds as we bought the house together a couple of years ago. Sounds like they want my name off the deeds or am I misinterpreting the condition?

BitterAndTwisted

No, I misinterpreted your opening post for which I apologise. Look at it this way: the lender would not want to lend to your husband only because they are not prepared to lend to you, only to find that their loan is not secured on 100% of the property. This is not unusual at all.

Despite the formal ownership of the property having to change, this will not affect your entitlement to half of the property should the unthinkable happen. Should the unthinkable come to pass, the mortgage will have to be settled first in order for you to realise your half of the marriage's assets. The property only being in his name as long as there is a mortgage on it does not affect your position as you are married. This is one of the advantages of legally formalising your relationship

yumyums

Thank you. That makes a bit more sense now. I guess we will have to bite the bullet and do what they say and look into getting it put back in both names when I become a permanent resident in June. Is this very expensive to do?
We were hoping to have the property in joint names because we will be renting it out and my husband is a higher rate tax payer and I'm basic rate.

getmore4less

yumyums wrote: »

Thank you. That makes a bit more sense now. I guess we will have to bite the bullet and do what they say and look into getting it put back in both names when I become a permanent resident in June. Is this very expensive to do?
We were hoping to have the property in joint names because we will be renting it out and my husband is a higher rate tax payer and I'm basic rate.

If there is a mortgage you won't be able to put it back into joint names without you becoming party to the mortgage.

yumyums

getmore4less wrote: »

If there is a mortgage you won't be able to put it back into joint names without you becoming party to the mortgage.

I was hoping they would actually let me become party to the mortgage once I get my indefinite leave to remain. I've got a permanent, full time job and earn a decent(ish!) salary. Good credit history, etc.

DVardysShadow

BitterAndTwisted wrote: »

... Despite the formal ownership of the property having to change, this will not affect your entitlement to half of the property should the unthinkable happen. Should the unthinkable come to pass, the mortgage will have to be settled first in order for you to realise your half of the marriage's assets. The property only being in his name as long as there is a mortgage on it does not affect your position as you are married. This is one of the advantages of legally formalising your relationship

I am not so sure. The terms of the offer are quite unequivocal

the property needs to be transferred into my husband's name alone and any legal or equitable interest of any other person needs to be extinguished

silvercar

yumyums wrote: »

Thank you. That makes a bit more sense now. I guess we will have to bite the bullet and do what they say and look into getting it put back in both names when I become a permanent resident in June. Is this very expensive to do?
We were hoping to have the property in joint names because we will be renting it out and my husband is a higher rate tax payer and I'm basic rate.

Why not wait until June, it seems silly to do the legal work twice.

G_M

As said, a mortgage cannot be granted to one person if there are other owner(s) registere on the property deeds.

Suppose your husband stops paying the mortgage and the bank tries to reposess the property. They can't, because you half own it and cannot have your ownership removed since YOU have not defaulted on any mortgage.

The bank therefore has no security.

If you transfer the property, and mortgage, into your husbands name now, there will be mortgage and legal costs: £500?

If you later transfer the mortgage and property into joint names there will be mortgage and legal costs: £500?

yumyums

It's funny how different lenders have different policies. We have applied for another mortgage to purchase our future home (hopefully) and they won't take my income into account because I'm not a permanent resident but they will allow me to be on the mortgage and deeds.
The funds from the remortgage of our other property are being used towards this purchase.

We had a letter today from our solicitors saying that as I'm gifting my half of the property to my husband, the lender requires him to get indemnity insurance at a cost of £200+!
Has anyone heard of this before? This whole remortgage is costing us a fortune now. Does the fee seem reasonable?