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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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Hello. We are in the process of getting three mortgages to

Customer Question

Hello.
We are in the process of getting three mortgages to buy a new house. One is secured against my london property, one against my husband's and one against the new house itself. Both former properties are currently rented out. The gross rent to mortgage ratio is about 3 to 1.

We have run into a last minute big hiccup - one of the lessor known credit agencies had a credit default registered against my name - in every other agency my credit is perfect. There is a real chance I won't be able to get the default removed in time to close although it was done in error. Can I transfer my property into my husbands name with the land registry and apply again for a mortgage? What would that entail?

Thank you,

KM
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hello, thanks for your question. My name is Tony, I can answer this.

tdlawyer :

I'm not sure transferring names will help, the issue now (especially after the April rule changes) will be whether you're a safe bet from a credit risk perspective and whether you can afford the mortgage that you propose to take out.

Customer : As it is a buy to let mortgage the property would be subject to my husbands credit rating and ultimately to the rental revenues of the property which are twice the mortgage payment.
tdlawyer :

Yes, I see.

tdlawyer :

So you want to transfer your own london property into his name and apply again.

tdlawyer :

IN that case, you can do this, but you would need the bank's consent to do this, if your London property is subject to a mortgage.

tdlawyer :

If you can get their consent, then this is easy to do. The bank will give you a letter confirming this is okay, and you can then fill out Form TR1 and lodge it at the land registry transferring title to the property. The bank may, as a condition of doing this, want his name on the mortgage too (either instead of or, more likely, in addition to your name).

tdlawyer :

It's unlikely to happen massively quickly, although the only timing limitation is for the bank to do it's thing. Normally, this might take 3 weeks or so, but it is up to the bank concerned.

tdlawyer :

If you do have a mortgage and the bank doesn't consent, then this is not going to be possible at all.

Customer : But we would be remortgaging the property so the bank will be bought out entirely and have no further exposure. My husband is already a guarantor on the property. So on what grounds would the bank possibly NOT not consent and how long does it take to have the land registry record the transfer? Are there any tax or other financial consequences? Thanks
tdlawyer :

If the bank is being bought out (the mortgage repaid) then it will not resist at all. It will have no grounds to.

tdlawyer :

As to tax/financial consequences, that's difficult to say without appreciating the figures etc., but there may be a stamp duty tax payable if you transfer the freehold for a sum of money, but if you do it for no premium, there shouldn't be (so long as it's freehold).

Customer : Ok yes it is freehold. A premium would be calculated how?
tdlawyer :

A premium for what, the sale price of the property of stump duty?

Customer : I didn't understand your last statement starting with "but".
tdlawyer :

Oh I See... sorry, I was saying if you transfer the property for no money, then there should be no stumpy duty payable on it.

tdlawyer :

Does this answer your question?