Using proceeds of wife's property sale to purchase new property as a first time buyer.

DaddyDingus

Hi all.

I've got a bit of a niche situation and looking for some advice if possible.

My wife had a mortgage on our first home in her name only as I was in the middle of an IVA at the time of purchase. Now several years later, shes been diagnosed with terminal cancer and her life insurance critical illness component paid off our mortgage. She is also in the process of medically retiring due to her illness.

We are now selling up and looking to purchase a property closer to her family so they can help with care for her and our children.

The issue is, obviously she can't be part of the mortgage application. And so I'm the sole applicant, but we plan on using the sale of the house as the deposit on the next -larger, more expensive (but easily affordable on my own) - property.

My question is, are there any legal issues regarding the transfer of property/funds between us that I need to be aware of? It's quite a niche situation and my research hasnt turned out and useful information as yet. 

Many thanks for your help 🙏🏼 

Emmia

As you're married you can't claim any first time buyer benefits even though you've never personally bought a property.

Brie

No there shouldn't be an issue with the transfer of money as long as you have agreed it.  If she didn't want to give you the money and you insisted that might be considered financial coercion but that doesn't seem to be the case here.

Sorry that you're all going through a difficult time.  

Albermarle

Sorry to hear of your wife’s illness.
There should not be a problem with what you propose to do, as long as it is explained clearly to the mortgage company/ conveyancer.
Maybe they will want something in writing, but should not be a problem I assume.

silvercar

I echo the sorrow expressed by others on your situation.

there is no reason why your wife can’t go on the deeds and mortgage as well as you, if that is what you both want. Given she is medically retiring the lender won’t take her income into account for affordability, but that won’t prevent her going on the mortgage.

SDLT_Geek

Emmia said:

As you're married you can't claim any first time buyer benefits even though you've never personally bought a property.

In a logical world @emmia would be right, but SDLT has some strange rules.  For first time buyers' relief, spouses are not fully taken together.  So if OP's wife has no other property interests and takes no share in the new property, then OP could potentially qualify as a first time buyer if buying a property to live in, for not more than £500,000 in England.

DaddyDingus

Thanks @SDLT_Geek, that was what my panic-fuelled research following @Emmia's response has suggested.  For anyone else searching for this information, the following paragraph is an excerpt taken from the Stamp Duty Land Tax Manual, SDLTM29845 - Definition of a first-time buyer FA03/SCH6ZA/PARA6:
"Where only one party to a marriage / civil partnership is purchasing the dwelling, it is not necessary to consider whether the non-purchasing spouse / civil partner has previously owned a relevant interest in a dwelling to work out eligibility, unlike when considering whether the higher rates apply (see SDLTM09730+)." 

Only time (and future conversations with our solicitor etc) will tell if I'm right or not!

P.s. Thank you to everyone for the kind words. Tough times. We would be absolutely stuffed would it not be for the critical illness cover. It's definitely worth taking for anyone on the fence!

Slinky

So sorry to hear of your situation.

I second the recommendation for critical illness cover, it paid out when a friend had a terminal diagnosis in her late 30s. With a daughter under the age of 5 and a self employed husband, there was one less thing to worry about.