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  • Legal FAQs

    Adding names to a property and remortgaging

    Hi Guys,

    Here's the situation...

    My dad owns a house - mortgage is completely paid off. He is 65 and self employed.

    We've talked about the idea of accessing the equity of this property in order to fund the purchase of additional btl properties in my ltd company.

    The idea i have is to add my mum and my name to the property and then for us to take out a mortgage on the property, releasing some funds for the purchase of additional properties.

    my mum is 60, but employed with a good full time job. i imagine her getting a mortgage won't be easy because of her age, but better than my dad. our combined salaries are approx £60k. If it's too painful for my mum to get a mortgage, than i would just take out the mortgage.

    so the questions i have are...

    is it possible to transfer names on to a property?

    if so, can the new names on the property take out a mortgage on said property?

    is it even necessary to transfer names. can i take out a mortgage on a property without being the owner?

    can those new funds then be used for the purchase of new properties within my ltd company? (i already own 2 btl's)

    Any thoughts on the above or how we might be able to access the equity in my dads property to purchase new properties would be much appreciated.

    Many Thanks

    Bhavin

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    To answer your questions:

    1. Yes, you can transfer names on a property. You need to consider any pitfalls like CGT if no PPR available, if the property is subject to a mortgage - mortgage lender's consent. There may also be CGT for you in the future if you wish to transfer it down the line as if you do not live there, there will be no PPR available.

    2. You cannot take out a mortgage on a property you do not own or are not purchasing so that you will become the owner. 

    3. Why would the legal owners of the property not be able to take out a mortgage? Being able to take out the mortgage will of course be subject to meeting the lender's lending criteria. The lender may have other concerns such as the occupants of the mortgaged property if they are not going to be the borrowers. May need to have the non-borrowing occupants take independent legal advice and sign occupation forms/ waiver or postponement of legal rights in favour of the lender.

    4. It depends if the lender is happy to lend you the money for that purpose? You seem to be saying you want to take out a mortgage and give the money to your LTD company to purchase another or other properties. A mortgage lender may not like that idea as the beneficiary of the money is therefore not the borrowers but the LTD company. 

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    Thanks Nats, some very helpful points. In response to number 3, the legal owner is my dad, who is 65 and self employed - not a great candidate for a mortgage. Also, his take home pay isn't great, and my salary is higher which is why i'm keen to take out a mortgage, as i will be able to borrow more.

    thanks

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