Confusion over removing someone from name on mortgage

wlondoner

Hello everyone

Sorry to ask i can see previous posts on removing someone from the mortgage but I'm still confused

My father and myself are on my mortgage (it has 18 years left on it) I've always paid it for the last 4 years not him, we agreed that he can be removed so it will only be myself named on it. I can see nationwide do a transfer of equity form / also called change of borrower that's £125 and they do an affordability test then if they agree they will remove his name on my current mortgage.
Sorry to sound dumb but there seems to be more than this than just the mortgage, such as land registery... do I then need to liaise with them to get his name taken off records or do Nationwide do this? What do I need to do once I've filled out Nationwides forms?

Thanks so much in advance for any help

G_M

Most lenders (I don't know about Nationwide) require the same names to be on the Mortgage Deed and the Land Registy Title.

Ask the Nationwide!

Who is currently named on the Title? I assume both of you.

It is likely that your father will need to transfer ownership from your joint names into your sole name. At the same time, assuming Nationwide accept you as sole mortgagee, you change the borrower name from joint names to your sole name.

Why not discuss it with the N/W though?

I've also assumed he does not live with you in the property. If he does, that might complicate things further.

wlondoner

How does he "transfer the ownership"

Flat was purchased with a mortgage with both or names on which I still have and want to keep so yes both names should be on the deed.

I'm seeing Nationwide later this week but I want to get my head around it all before I go.

Yes I live alone he doesn't live with me and is completely happy to be removed from the mortgage/deeds whatever.

I don't understand any of the land registry part / if I need to do anything there.

G_M

The Land Registry records who owns the property.
The mortgage Deed records who has borrowed money.

You can pay £3 here to download the LR Title and see who owns - though I'm 95% sure it will be you and your father jointly.

Transfer of ownership is done by submitting 3 forms to the LR:


* TR1
* AP1
* ID1
See
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1


However, as there is also a mortgage involved, and a change to the mortgage, I am pretty confidant that the Nationwide will insist you use a solicitor.

eddddy

wlondoner wrote: »

Flat was purchased with a mortgage with both or names on which I still have and want to keep so yes both names should be on the deed.

So...

• You and your father jointly own the property you live in
• You and your father have a joint mortgage on the property
• You pay the monthly mortgage payments
• You want to transfer the mortgage to your sole name
• (but you want to continue as joint owners)

Firstly, I don't think Nationwide allow jsut one person to be on the mortgage of a jointly owned property.

Secondly, what are you trying to achieve? What will be different/better if the mortgage is in just your name?

wlondoner

No I don't want to continue as joint owners I want to be the only owner no point my father being on it if he would rather not be.

I just want to take it all over myself officially. I thought it should be pretty simple but it's not seeming that way.

This will help in the future when I move into a bigger place and get a bigger mortgage in my own name as I wouldn't want my father on that so best I sort it out now and it being all in my own name.

Thanks

bigisi

wlondoner wrote: »

This will help in the future when I move into a bigger place and get a bigger mortgage in my own name as I wouldn't want my father on that so best I sort it out now and it being all in my own name.

Thanks

In that case I'd be tempted to leave it as it is for now and address is as and when the above happens. The solicitor will do the extra work to remove your dad at the same time as they do the work when you sell. This will mean you only pay one lot of solicitor fees (although slightly higher at the time of sale due to the extra work).

No point doing this now unless you have to.

Mojisola

wlondoner wrote: »

Flat was purchased with a mortgage with both or names on which I still have and want to keep so yes both names should be on the deed.

Yes I live alone he doesn't live with me

Has the property risen enough in value so that he will have to pay Capital Gains Tax?

eddddy

wlondoner wrote: »

This will help in the future when I move into a bigger place and get a bigger mortgage in my own name as I wouldn't want my father on that so best I sort it out now and it being all in my own name.

A mortgage is specific to a property. If you buy another property, you will have to apply for a new mortgage.

If you sell your current property and buy another one...

... you (and your father) would pay off the mortgage on your current property. Then you alone could take out a mortgage on the new property.


Unless there are other issues, which perhaps you prefer not to mention (like you don't trust your father, or you are concerned that he may die and his ownership pass to somebody else), it may be easier to leave things as they are.

wlondoner

Why would he have to pay tax he isn't taking any money out of this it's just removing someone from a title.

gingercordial

wlondoner wrote: »

Why would he have to pay tax he isn't taking any money out of this it's just removing someone from a title.

Because he is giving up 50% ownership (I'm assuming equal shares) which is in effect selling that share.

Back whenever you bought it together he purchased 50% of the property. He is now selling that to you, but for no money. However HMRC sees sales between family members as happening at market value not the amount of cash changing hands. Therefore the gain for him will be 50% of the market value less 50% of what you bought it for (purchase price not deposit or mortgage value). It is not his main home so he cannot get relief for this tax - unless he has lived there in the past? It could be expensive if you are in London as your username suggests.

This is pretty much inevitable either now or when you eventually sell and move on somewhere else - he has had an investment in property he does not live in and so is liable to CGT when he sells it.

Also depending on the amount you may also have to pay SDLT on buying out his share. For SDLT the rules are different and even if there is no cash changing hands the amount paid is deemed to be the amount of his mortgage you are taking on. So if he is a 50% owner this will be 50% of the outstanding mortgage. If this is over £125k there will be SDLT for you to pay.

The SDLT could be avoided by leaving it until you are ready to buy somewhere bigger. You'll pay SDLT on that new place, of course, but at least you won't pay it now on the transfer of the mortgage for no good reason.