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Conveyancing

Transfer Of Equity

Transfer of equity (or ‘transfer of title’) is the process of changing the legal ownership of a property by adding or removing somebody from the property title deeds. There are many reasons why you might need a transfer of equity. Perhaps you are moving in with a new partner, you have separated from your partner, or you would like to give your adult children a stake in your property. Whatever your reason, our solicitors can help you.

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What is a transfer of equity?

Equity is the amount of your property that you own. To calculate this amount, you subtract the mortgage on your property from your property’s market value.

All joint owners of a property hold the legal title to the property as joint tenants. However, the beneficial interest in the property can be held in two different ways:

  • As beneficial joint tenants. If one owner dies, then the other people named in the property title deeds will receive that person’s share. There is no need to apply for a grant of probate. The surviving owner or owners will need to send a copy of the death certificate to the Land Registry.
  • As beneficial tenants in common. In this case, each owner has a separate share in the property. If one person dies, their share will go to whoever they have named in their Will.

A transfer of equity happens when someone is added or removed from the property title deeds, but at least one of the original owners stays on the deeds. The process does not necessarily involve any money changing hands.

When might you need to transfer equity?

You might need a transfer of equity if you:

  • Have married or entered into a civil partnership and wish to add your partner’s name to the house deeds.
  • Are divorcing or separating and wish to remove somebody’s name from the deeds.
  • Co-own a property and would like to change the percentage shares everybody owns.
  • Wish to transfer a share of your property to a family member.

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How do you transfer equity if there is a mortgage?

A transfer of equity is more complex if there is a mortgage on a property, as the mortgage lender needs to give permission for the transfer to take place. That is because whoever is left on the property title deeds will be liable for the leaving person’s share of the existing mortgage. The mortgage lender will want to check that the remaining owner or owners can afford these higher mortgage repayments.

When someone is being added to a property, the mortgage lender will want to check their financial suitability. They will carry out checks on that person before they agree to the transfer.

If the mortgage lender does not consent to the transfer of equity, it can only go ahead once the outstanding mortgage is paid off. To do this, the remaining owner could apply to remortgage with another lender who will agree to the transfer.

What are the costs of a transfer of equity?

Fees will vary depending upon the value of your property and whether you need to remortgage.

The costs of transfer of equity include conveyancing fees, Land Registry fees, mortgage lender’s fees and stamp duty land tax (SDLT). SDLT is paid when one party takes on equity or a mortgage which is worth over £125,000.

Please get in touch with us for a conveyancing estimate based on your circumstances.

Talk to Davisons transfer of equity solicitors

Whatever your reasons for wishing to transfer ownership of a property, our solicitors at Davisons can help you. We have successfully helped many people in all circumstances to complete a transfer of title quickly and easily.

Have any questions or need any help?

Our team of specialist lawyers are experts in their field. Be confident in their advice and decisions to help get the right outcome for you. Contact us today to see how we can help

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Transfer Of Equity FAQs

A transfer of equity is more complex if there is a mortgage on a property, as the mortgage lender needs to give permission for the transfer to take place. That is because whoever is left on the property title deeds will be liable for the leaving person’s share of the existing mortgage. The mortgage lender will want to check that the remaining owner or owners can afford these higher mortgage repayments.

When someone is being added to a property, the mortgage lender will want to check their financial suitability. They will carry out checks on that person before they agree to the transfer.

If the mortgage lender does not consent to the transfer of equity, it can only go ahead once the outstanding mortgage is paid off. To do this, the remaining owner could apply to remortgage with another lender who will agree to the transfer.

If you wish to gift part of your property to a family member and you own the property as a beneficial joint tenant, you may prefer to have a deed of assignment drafted rather than a transfer of equity. A deed of assignment is a type of conveyance that does not involve changing the title deeds to your property. Therefore, you would not need your mortgage lender’s consent.

A deed of assignment enables you to transfer beneficial interest in your property to a family member in a tax efficient way as part of inheritance tax or capital gains tax planning.