Transfer of Equity

Transfer of equity can occur for various reasons when a property is transferred from one person or party to another. For example, a transfer will typically take place in a divorce or separation, when partners decide to own a property jointly or in cases of inheritance.

We can help to keep the transaction amicable and ensure it runs smoothly and correctly to prevent future complications. Familiarise yourself with the process below and if you would like further advice on the transfer of equity, please contact us for a free chat.

Before you start there are a couple of things to bear in mind:

If there is a mortgage lender involved, have you informed them of your decision? This is important because not only do they have a vesting interest on your property but their records also have to be amended to incorporate the change. In certain cases, some mortgage lenders will insist that certain criteria be met in order to transfer the property.

Financial Advice - If you do require additional finance in relation to a mortgage, make sure that you are getting the best deal. This would apply in cases where properties are transferred from "joint ownership to sole ownership" in which event, the mortgage lenders would need to be satisfied that you are able to maintain the monthly mortgage payments on your property. We would recommend you take full independent financial advice on this front.

Once you are happy on these two points, then the procedure is as follows:

1. We will write to your existing mortgage lender informing them that we have been instructed on the transfer of equity transaction and we will request a Mortgage Redemption Statement and the Title Deeds. We would also request the latest "Official Copy of the Register" from the Land Registry confirming present ownership. The mortgage lender will then write back confirming instructions and also requesting that certain criteria be met. If there were any financial issues involved, then this part of the transfer of equity is sorted out between you and your financial adviser or existing/new lender, and we would not normally get involved with this process.
2. Once your new mortgage application has been finalised a Mortgage Offer will be issued. By this time we would hope to have your title deeds and searches as requested in step 1. If we have requested searches then we will advise you and the lender of any problems with the search results. We will also check whether there are any life policies with the deeds and whether these would require to be surrendered or transferred. If there is no need for a further advance or mortgage in the transaction, we will then prepare a Transfer Deed, to the effect that the property is transferred from either joint to sole ownership or vice versa, whichever the case might be.
3. A completion date is then arranged for the earliest possible date and the Transfer Deed and Mortgage Deed (if applicable) sent to you for signature and return. In some cases, where applicable, there will also be an additional Inland Revenue Form SDLT60 which is a self-certificate under Section 79(3) of the Finance Act 2003 which provides the Revenue with the appropriate reason as to why you should be exempt from paying stamp duty land tax. Also, if applicable we will also ask your current mortgage lender for an updated Mortgage Redemption Statement so we have the exact figure to settle. The completion date is usually arranged for the end of each month to assist you in regulating your mortgage payments but if you have any specific preferences, these can be honoured.
4. Completion day. If there is any mortgage advance coming in from your new mortgage lender, as soon as this is received, we will settle the amount owing to your existing lender to pay off the mortgage. Any balance due to you will be sent to you on that day and we will proceed to complete the transaction. If on the other hand, if there is any balance due to the nominated party, we will also upon your authorisation make the payout to the other party provided we receive joint authorisation from both parties involved.
5. We will send the Transfer Deed and Mortgage Deed together with the Inland Revenue Form SDLT60 (where applicable) to the Land Registry so that they can amend and update their records. Once they have done this they will send the Title Deeds back to us. We will then forward them onto the new lender or yourself, whichever the case might be.