Frequently asked questions relating to Foundation Home loans transfer of equity

• What can I do where I am not happy with the lawyer who conducted our transfer of equity conveyancing?
• I currently have a joint Foundation Home loans mortgage with my cousin and am investigating the feasibility of him assuming responsibility for the whole mortgage and subtracting myself from it, so as to enable me to purchase a property with my partner. The remaining mortgage is in the region 200k, and the property value is in the region 450k. Is this a transfer of equity? Is stamp duty due?
• I am led to believe we would need at least AP1 and Transfer Deed. Is this true?
• Can I apply to request a further advance from Foundation Home loans as part of a Transfer of Equity?
• Is it sensible to stop the direct debit for my mortgage with Foundation Home loans as soon as a date for my remortgage and transfer of equity has been set?
• I already have a home loan with Foundation Home loans and am keeping my current mortgaging but applying to have it in my name alone so my former partner won't be on it any longer. How long does the whole transfer of equity process take?
• My dad died early last year leaving a unencumbered property to me and my half brother in equal shared. He has always lived in the house, there was a provision in her will specifying that the housecould not be sold for 24 months after her death so he could reside there for a while. He now wishes to remain in the premises beyond the specified period. We have discussed a transfer of equity. Would I be right in thinking that we'd get a valuation then he'd get a home loan in the conventional way to acquire my half from me?

Examples of information requested in a lawyer form relating to Foundation Home loans Transfer of Equity

Information to consider in conjunction with the above Foundation Home loans transfer of equity information :

Tax and Legal

There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Foundation Home loans conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, the lease may require that you have a license to do so from the freeholder. If such conditions are not complied with you may be in breach of the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your lawyer will check with Foundation Home loans This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as Foundation Home loans or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy is dependent on the market value of the property at the conclusion of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Foundation Home loans Mortgage

When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Foundation Home loans is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided on this webpage is for general information and only applies to England and Wales. It should not be regarded as advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.