Change of parties - private mortgage.

MrsMushroomboat

When my daughter and her partner wanted to buy a house, they were not able to get a regular mortgage as they didn't meet affordability criteria. We then agreed to lend them the money ourselves, as the repayments would be half of the rent they were paying. When the house was purchased, the loan was registered as a mortgage and a charge set against the property at the Land Registry. A solicitor acted on our behalf in this matter, and another one acted on daughter and partner's behalf, handling the conveyancing and mortgage paperwork, so I hope and trust that this was all done properly.

Some years later, that relationship has ended, and they have agreed that the house (and mortgage) should be transferred to my daughter's name, with no financial exchange involved. He is content to walk away from the property, but would like to be removed from the mortgage as he would like to buy his own property in the future.

Obviously the change of ownership needs to be registered with the LR, but the steps and forms for that are fairly well documented - but how to make changes on a private mortgage seems to be quite unclear, I guess it's quite an unusual thing to do!

What steps do we, as the lender, need to take to enable this? Can one solicitor handle all of this? We would naturally like to keep the costs down where we can, but it does need to be correct.

Any advice would be very welcome.

MyRealNameToo

Do either party feel they need advice? Is your daughter already receiving advice from a lawyer on the split?

Its possible to have a lawyer act as joint counsel as long as they arent concerned that there are any conflicts of interests

MWT

It is certainly going to require a solicitor, and I would not be at all surprised if they insisted on the partner getting independent legal advice as they are walking away from a share in the equity…

user1977

but how to make changes on a private mortgage seems to be quite unclear, I guess it's quite an unusual thing to do!

No different from the process if it were a non-private mortgage. Solicitors will be used to it.

The borrowers should be keeping you free from expense (including paying for any legal representation you feel you need), as they would if you were any other lender!

silvercar

https://forums.moneysavingexpert.com/discussion/comment/81921776#Comment_81921776

They are also walking away from a mortgage liability, assuming the OP is prepared to allow this. That has a price, to no longer be liable for a mortgage has a value.

MWT

https://forums.moneysavingexpert.com/discussion/comment/81922784#Comment_81922784

Indeed, but solicitors are still likely to want the comfort of not having advised both sides of this deal I'd have thought, unless they are large enough to be able to use two different partners for example…

As ever it is up to them of course…

MrsMushroomboat

OK, so it looks like every party will need a separate solicitor then. My daughter is looking for a local firm to advise her now. The situation is fairly amicable, everyone just wants the lines drawn, so hopefully it can be made straightforward.

Thank you all for the input.

MWT

https://forums.moneysavingexpert.com/discussion/comment/81923073#Comment_81923073

Confirm with the one your daughter selects and see what they say regarding conflict of interest…

silvercar

Often you can use one firm of solicitors and take independent advice from another solicitor in the same practice.