Transfer of Equity advice

Blue_Cat

Hi,

My Dad and I live with each other.  We purchased our Council house via the RTB scheme almost 6 years ago. We are jointly named on the Title Deeds, and on the mortgage.

My Dad had no interest in becoming a home owner himself, but I wanted to buy the house as an investment for my future, and security to know I’ll still have my home should anything happen to my Dad.  I have no intention of moving out, and I intend to stay here and care for my Dad (not that he needs a lot of care right now, but of course, this is likely to change as he gets older). 

I want to make some home improvements for the both of us (convert bathroom into a wet room, install a new kitchen, fit a much needed new roof etc.).  In order to finance this work, I need to release some equity from the property, by way of a remortgage.  

Our current lender has said that my Dad and I cannot remortgage, due to my Dad’s age.  They have said that I would need to remove my Dad from the mortgage, and from the Title Deeds, and then remortgage solely in my name.  My Dad is happy for this to happen. 

So, getting to the advice that I require.  I have been provided with a (re)mortgage offer, and I have a solicitor acting on my behalf for the remortgage, and for the Transfer.  My Dad has an independent solicitor acting on his behalf - but the firm has proven to be an absolute nightmare in terms of lack of communication/doing any work.  The first solicitor from the firm, who was representing my Dad, went radio silent for months, having barely done any work - and then we found out they’d left!  My Dad’s case has been passed to another solicitor at the same firm, but again, it appears that no work is being done/there are severe communication issues.  Meanwhile, I have already had to have 1 extension to my mortgage offer, and the delays are causing us some stress.   

We have been trying to get this sorted for well over 6 months now (we really want to get the repairs done, and the renovations underway).  We appreciate that there has been Covid(!) and that conveyancing solicitors have been extra busy due to Stamp Duty extensions, but it is getting ridiculous.  We can’t seem to move forward, because of my Dad’s solicitor.  The new solicitor, who has been handed my Dad’s file well over a month ago, seems to want to start from scratch (after we made a complaint about the lack of communication and no work having being done).  This is delaying proceedings further.  They have asked if my Dad can come into branch in so many weeks time (the branch isn’t close by, plus we are worried about Covid and wanting to limit exposure), then they have said they “may have to do a home visit”.  Of course they need to do their due diligence and properly advise my Dad, but can’t they do this via a letter?  Or a video/phone call?  My Dad told them he didn’t want to come into branch, and now we have not heard from them - again. 

So do we try and find another solicitor for my Dad?  Even though we have already paid some money to his existing firm?

Or, do we pay off the existing mortgage (a family member is willing to lend me the money for that), THEN Transfer the property solely into my name, and then I can apply for a remortgage (just in my name) again?  

Is it easier to complete a Transfer of Equity when there is no mortgage on a property?

And if there is no mortgage on the property, can we just use 1 solicitor instead of 2?  Or no solicitors at all?

Any advice would be much appreciated.
 

kingstreet

How many lenders did you approach, or did you use a broker?

I suspect one and none. There was absolutely no need for a transfer of equity. It's being done just to satisfy one lender where others would simply have accepted him as an occupant and ignored his age as his income was being ignored.

Where do you go from here? I'd get proper advice and start again TBH.

Blue_Cat

Hi kingstreet,

Back in 2015 when we were trying to purchase the property, and I had a very good credit rating, we came up against lenders not willing to give us a joint mortgage due to my Dad’s age.  We were then accepted by Halifax.  They granted us a mortgage, but we could only have it over a limited number of years, again, because of my Dad’s age. 

My credit rating has unfortunately fallen since then, and our existing lender (Halifax) said that I would not pass their credit check.  The amount of Equity we need to release from the property, and the number of years I’d need the term of the mortgage to be over (for affordability) means that my Dad needs to be removed from the mortgage - because of his age.  Halifax said that creditworthiness aside, if my Dad was being removed from the mortgage, then I would have to change mortgage providers anyway - due to their rules?  

So Halifax was a no-go, and I was advised that most High Street lenders probably wouldn’t touch me.  

I therefore enlisted the help of an experienced Mortgage Broker, who assisted me in applying with Masthaven - a specialist lender.  I have passed all of Masthaven’s underwriting checks, and I have accepted their (re)mortgage offer. 

The only problem now is, this issue with Transferring the property solely into my name, so that my (re)mortgage can go through.  As I say, everything is in place on my end (mortgage offer, solicitor) - it’s just the solicitor’s firm representing my Dad who are being bothersome/putting a blocker on this going through. 

Ideally, I would’ve liked to have kept things as they are - Dad and I on the Title Deeds and mortgage.  But lenders have told me that due to my Dad’s age, I cannot get a mortgage for X amount of years with him on it.  The only way around this apparently is to remove my Dad and have it all in my name.

Tiglet2

I think you could probably do the Re-mortgage and Transfer of Equity using just one solicitor.  It would mean that your dad would not be legally represented, but your solicitor can send him the forms to sign and letters advising him of the risks involved and to seek independent legal advice should he feel he needed to, but if he is ok with coming off the deeds and mortgage and is happy to sign the forms, I don't think it is absolutely necessary that he has to have his own solicitor.  I assume that the re-mortgage would be enough to redeem the current mortgage and provide a lump sum for the redecoration costs.

Alternatively, you could pay off the current mortgage and do the Transfer of Equity yourself once the current charge has been removed from the title.

You would need ID1s for both of you, AP1 and TR1 submitted to HM Land Registry, together with their fee.  Once your dad has been removed from the title you can apply for a new mortgage in your own name.

YellowCarBlueCar

I think Tiglet is right in that your father doesn't have to have legal representation.  I bought a sibling out of their share of a jointly inherited house and we used the one solicitor to represent me and the lender, and handle all the land registry stuff.  So long as there is no conflict of interest between the parties that is.
One thing to check though is that your lender doesn't apply the "six month rule" to the equity transfer. Some lenders won't lend on a property which has been sold in the preceding 6 months, and may include equity transfer in that criteria. 

TBagpuss

I suspect that the reason bot that he needs separate advice and hat the solicitors want o see him in person is because he is transferring his interest in the property to OP for free, rather than OP paying him for his share. 

It's not in Dad's interest to do that, as he is a giving away a valuable asset for nothing, and putting himself in a position where he has no security in relation to housing. 
I am not surprised that the solicitors are reluctant to do things via letter or phone or video, as in those cases, they have no way to tell whether he is actually acting f his own free will or whether OP is putting pressure on him 'off camera'

(OP, I am not suggesting that you are doing any of those things, but I can see why  the situation is throwing up a huge red flag for the solicitor, and they are, entirely properly, insisting on making sure that your dad does fully understand and that they can speak to him in circumstances where they can feel confident that he is not being coerced or put under pressure by anyone else)

wilfred30

OP - how old is your Dad and is he in reasonably good health?

I note that you want to convert your bathroom into a wet room, presumably for your Dad, which would suggest that he already has mobility issues.

He needs to be aware of the potential risk of giving away his half of the house for nothing, if it comes to him needing care in the near future, as that may well be considered deprivation of assets.  Just something to bear in mind.