Self Building - Transfer Mortgage to Family Member

soapstar88

Hello,

I would like to know the available options to transferring a mortgage to another family member.

Basically we wish to build our own house, and sell our current property to release equity to partly fund our build. Unfortunately the market conditions in our area have dramatically dropped, with our similar properties selling for 20k+ less! Ouch. Given this I refuse to selling at a loss and throw away our large deposit we originally paid towards this property.

We currently have 140k left on our mortgage. Transferring our mortgage is the only way I can see us keeping our investment in the family without throwing our money down the drain to start our self build. Keeping this mortgage is too much for us and obviously goes down as a huge debt against our self build affordability.

Can anyone advise on the options available for transferring our mortgage debt to someone else? I assume this entails transferring deeds etc? Maybe this is not worth it...

davidmcn

Do you mean you wouldn't tolerate selling at a loss to a third party, but you would if the buyer was family?

AnotherJoe

You cant transfer a mortgage. And even if you could, (which you cant) youd still either make a £20k loss or saddle someone else with a £20k loss.
Eg let's say house was £200k when bought with £140k mortgage and is now worth £180k.
So new buyer either gives you £40k and gets £140k mortgage (you've lost £20k) or pays you £60k and takes out mortgage for £140k, a total of £200k for a house worth £180k (they've just lost £20k).

End of the day you are £20k down.

TonyMMM

You can't transfer a mortgage, and you can't release equity you just don't have.

You need a different plan to raise the finance for your build.

soapstar88

Thanks for your advice everyone. Its such a frustrating situation. In a way yes I would be willing to keep this property in the family and accept a loss. I feel this property is in a prime location (not at the moment with the market conditions) and will inevitably increase in value in coming years and be an excellent buy to let opportunity.

It looks like i am left with the option I do not want but will have to accept...be stubborn and stay in this property until its value increases or sell it at a huge loss.