Transferring restrictions during transfer of equity

general_exception

Wondering if anybody on here could advise me.

I currently own a property that is mortgaged. The property is jointly owned by my ex partner and myself, however I have been keeping up mortgage repayments. The mortgage is currently an interest only mortgage.

There are two restrictions on the title deeds, one on my ex partners share and the other on my share of the equity.

The restriction placed on my ex's share is for a catalogue debt of roughly £3600 (or at least that's what it was at the time, but I'm not sure if she's been paying towards it). The other restriction is against my share, and I currently owe £21,000.

The outstanding mortgage balance is £109,000 and the property has been values at £118,000 so there is £9000 equity in the property. When this equity is split 50/50 (so £4500 each) it will happily cover the £3600 my ex owes but it is not enough to cover the £21,000 I owe.

I am wanting to carry out a transfer of equity or transfer of title, as my ex has never contributed towards the property (hence why it is still on interest only) and I am in a position now where I want to transfer the property to myself and start paying off my mortgage on a repayment basis.

As a sole applicant, my mortgage lender is happy to lend me the £109,000 outstanding on my current mortgage, however they are not willing for me to borrow additional funds against the property in order to cover the £21,000 (so £130,000 in total) as this would be more than 100% of the LTV (property is only worth £118,000), and due to my personal circumstances (salary etc).

I have been to see a solicitor about this (albeit a high street one) and I have been advised that there must be funds available for the restrictions to be dealt with. I have however seen this thread, which is interesting - the one about charging order myths, and that with a restriction the conveyancer only needs to give notice of the sale, although it seems my solicitor is not aware of this, a common theme it seems. (sorry can't post links as a new user).

My solicitor has advised me to write to the creditor, stating my intentions and circumstances and asking them if they would be happy for the restriction to remain on the property after the transfer of equity has been done. Is this something anyone is familiar with, or is it even possible ?

I have written the following letter, I would appreciate it greatly if someone could advise on my approach ?

I would presume that transferring the restriction (if that terminology makes sense) would give them a stake of 100% of the equity then instead of only 50%, so it is really in their best interest to do so ?

Any help or advice would be greatly appreciated, as I've been going around in circles with this for a while now, and I'm starting to see no light at the end of the tunnel :-(

Thank you.

WITHOUT PREJUDICE

Dear Sirs,

Your client: National Westminster Bank Plc
Account number: XXXXXXXXXXX Outstanding amount: £21,431.04


I write with reference to the money which you are claiming on the above account and believe you have a restriction registered against the above property.

The property is currently valued at £118,000.00, with an outstanding interest only mortgage balance of £109,113.21, therefore there is currently £8886.79 equity in the property. I am wishing to carry out a transfer of equity, as the property is currently jointly owned, from my ex girlfriend to myself.

I understand that you have an interest in my share of the equity in the property, which would be £4443.40, and this is not enough to cover the outstanding amount of £21,431.04, which would prevent completion of the transfer.

I confirm that I cannot finance the outstanding amount by borrowing additional money, as my current mortgage lender is a), only happy to lend me the outstanding balance as a sole applicant and b), this would mean that I would need to borrow £130,544.25 which is more than 100% of the property value.

Would you permit for the transfer of equity to take place and for the restriction to remain on the property, as my circumstances currently do not allow me to finance the outstanding amount.

dancingfairy

Do you think you can get hold of someone at your creditors who can actually make that decision/ understands what you are talking about?
Is the restriction going to stop a remortgage? My vague understanding was that they had to be made aware of a sale/ remortgage etc but couldn't necessarily stop a sale, they merely had to be advised.
I can't see why the creditor wouldn't agree in principle but actually being able to do it is another matter.
Good luck on your quest to get this sorted. It would be interesting to see how you get on.
Df

general_exception

dancingfairy wrote: »

Do you think you can get hold of someone at your creditors who can actually make that decision/ understands what you are talking about?

That's a very good point ! It seems to me getting a solicitor that wants to deal with it is enough of an issue itself. They all seem to be very blah-zeh about it all !

dancingfairy wrote: »

Is the restriction going to stop a remortgage? My vague understanding was that they had to be made aware of a sale/ remortgage etc but couldn't necessarily stop a sale, they merely had to be advised.

This is certainly how it seems, especially having read the other thread I mentioned. The wording on my title deeds is exactly that. However every solicitor that I have spoken to have the same answer, that they must be dealt with, however I'm pretty sure as per the thread says that they are not aware of the differences.

I have considered going ahead with it anyway and mentioning nothing at all about the restrictions, however I am not really in a financial position to have the whole thing "fall through" and then having to owe the solicitor money for the conveyancing work they did do, if that makes any sense ?

Thanks for your reply though.