Transfer of Equity

cha1n · 18 January 2019 at 11:15AM

Hi

Quick question regarding a transfer of equity. My ex is being removed from our currently joint mortgage and my girlfriend is being added.

The house is currently under extensive renovations and if it were to go on the market in its current state, it would probably sell for £40k less than it's current valuation by the mortgage provider. For this reason, my ex has agreed to a smaller buy out fee than what the mortgage company may think is 50% of its current equity. In numbers:

Mortgage company valuation; £300k
Current actual value £260k (cash buyer only due to extensive renovations in progress)
Remaining balance £235k

I'm worried that the mortgage provider/solicitors may meddle and suggest that her entitled equity is £32.5k (their valuation, minus loan balance, divided by two) when it's actually much lower. She has agreed to a lower amount because of its condition. Am I able to pay her whatever she's agreed to?

Thanks

Bermonia · 18 January 2019 at 11:48AM

As I understand it it’s nothing to do with the mortgage companies solicitor - how you decide to dissolve your joint finances is an issue for you. However please feel free to run this past your own solicitor, or others on here may have a different opinion.

Dependent on market fluctuations since the property was last valued they could of course request that a new valuation is done which could be a problem given the figures you have above.

cha1n · 18 January 2019 at 11:51AM

Thanks for that, fingers crossed it all goes smoothly then.

The chap from the lender said that they don't request a new valuation on the transfer of equity, so hopefully that's OK. That's one of the main reasons we're going this route instead of putting it on the market. I know it's worth more than what it will get sold for at the moment, which is why I'm willing to take it on. that doesn't change the fact that only cash buyers will be able to purchase it at the moment and they'll drive the price down.

Bermonia · 18 January 2019 at 12:25PM

Fingers crossed for you then

Transfer of Equity

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