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• Transfer of Equity in Matrimonial Situations

Introduction

One of the consequences of a marital or non-marital separation may be that you have to divide your jointly-owned property or transfer equity. The equity refers to the value of the property after repayment of any loan.

Sometimes couples agree to sell their house and simply divide the profits, however if the property is a family home, they often decide that one of them will buy out the other's share and maintain ownership. In the case of disputed financial proceedings following divorce, the couple may not have been able to reach an amicable agreement and a court order may be necessary to give effect to a fair compromise which may require a transfer of equity order.

In all of these cases, a transfer of equity would be necessary to transfer the home from joint names to a single name.

If the property was subject to a mortgage which is intended to continue after the transfer of equity, it will be necessary to obtain the permission of the lender who may not be willing to continue funding the loan, unless the person to whom the property is being transferred has sufficient income to pay the mortgage instalments. If that person has insufficient income, the Lender may insist that the other former joint owner also remains liable on the mortgage after the transfer of the equity. Alternatively, some borrowers may use this opportunity to arrange a new mortgage with a different lender. This process can be combined with the transfer of equity and is known as transfer and remortgage.

Unfortunately if the property was purchased only recently by using a large percentage mortgage there may be no equity of value to transfer which means the outgoing owner will not receive any payment but may be released from his mortgage liabilities with the lender.

We recognise that these transfers often take place at very difficult times in people's lives. Our conveyancing department therefore works in co-operation with our family department and any other professional advisors such as mortgage brokers to ensure that the transaction is handled as smoothly and efficiently as possible.

For a quote please email us at conveyancing@ashfords.co.uk