Advice needed on transferring/buying house from my girlfriend and her brother

dcm1105

Hi

I currently live with my girlfriend in her house that she owns with her brother. There mortgage is up in December and I am wanting to transfer the mortgage over to myself and my girlfriend or buy my girlfriend's brother out.

I am just wondering how this may work? He is happy to just transfer over the house to me and me and my girlfriend will just give him the money he put down in the deposit which was £10k.

Is this possible or do me and my girlfriend pretty much have to buy the house from him and my girlfriend like a normal house sale?

Bit of a strange situation I know but any advice would be greatly recieved!

Thanks

ACG

You can do a transfer of equity - solicitors deal with this. But you would need to speak to the lender as they will need to check you and your gf pass their current criteria.

If not, when it comes up for renewal you can see if other lenders will accept you and your girlfriend at that point in time.

dcm1105

So what is the criteria that the lenders would be looking for? The reason I ask is I had bad credit in the past with a couple of defaults but 7 years have been and gone and they have dropped off my file now and I have no outstanding/adverse credit etc so I'm hoping that I am eligible for a mortgage?

Also, what sort of cost would you normally be looking for with a transfer of equity?

holly_hobby

The cost for a transfer of equity (TOE) varies but you can expect anything between £400 - £600.

If your adverse was defaults, and they have now dropped off your credit file (ie following their 6th anniversary or registration) - then they won't impact on the app.

If GF is saying on whilst you are being added, its technically a remortgage (as she already holds legal title) and even if you find a fees free deal, it does not include the cost for the TOE in respect of bro off and you on.

What is the outstanding mortgage ?


Holly

jacobtheamish

dcm1105 wrote: »

So what is the criteria that the lenders would be looking for? The reason I ask is I had bad credit in the past with a couple of defaults but 7 years have been and gone and they have dropped off my file now and I have no outstanding/adverse credit etc so I'm hoping that I am eligible for a mortgage?

Also, what sort of cost would you normally be looking for with a transfer of equity?

Each lenders criteria differs slightly, but as a rule of thumb they will need to check affordability based on you income and current commitments.

dcm1105

Ok so the process doesn't sound as complicated as I thought it might be?

Outstanding mortgage is £117k

holly_hobby

Ok, the reason why I asked the os mge debt, was to determine if you would be exposed to SDLT as a result of the TOE exercise.

However, with a current os joint mge of 117k, and the consideration effectively being equal to the transfer of Bro's share of mge debt to you (which HMRC assess as representative of a 50% share, in respect of joint mortgages), there is no SDLT, as the consideration falls well below the current nil rate threshold of 125k.

However, from a mortgage servicing point of view, I must make clear that once you become a joint mortgagor, you become jointly and severally (singularly) liable, with your fellow mortgagors, for servcing the debt - the 50% defined split discussed above is only relevant for TOE SDLT assessment purposes.

Anyhoo, now thats cleared up, its now up to the lender to assess your suitability and process things from there - if you do't meet their criteria, and depending why, all may not be lost as you could explore a remortgage option (ie source an alternative provider), whom may accept the business, based on you & GF, with a simultaneous TOE removing Bro - a whole of market mge broker is your best bet if thats the case.

Hope this helps .. good luck

Holly x

dcm1105

Ok either way sounds quite straight forward then?

Their current mortgage is with the Halifax but that is the bank I had issues with years ago so we are going to stay clear of them, try our own bank and other lenders.

Sure we will get there.

Many thanks for your advice