Can I transfer our existing flat to a relative?

Posted on 21 September 2012 by Toni


Me and my partner and his mother as a guarantor bought a two bed flat in 2008 with a mortgage of 86000 however we now have two children and need a bigger house. I was thinking of signing the flat temporarly to his mother as she no mortgage on a buy to let mortgage and we purchase a house. Once we have become comfortable in our new mortgage then we put the flat back in our names is this possible? The reason for this is because the flat are still only selling for about 79000 which is where our mortgage is currently at.

Toni

If you want to transfer the ownership of your flat to your partner's mother, you will either have to get consent to a transfer subject to mortgage from your existing lender or she will have to remortgage the property into her sole name.  If the property is to be let I suspect that your existing lender will not agree to the transfer and she will have to arrange a buy to let remortgage.

The purchase price will have to be agreed between you, but whether she can raise enough to repay your existing mortgage and give you a deposit for the purchase will depend on the anticipated monthly rental income being sufficient to support the loan and how much she has in savings or is willing to raise against her own property.  Lenders will only consider loans up to a maximum of 85% of the lower of the purchase price or surveyor's valuation and she is more likely to get only 75%.

I am not sure that this is the answer to your current situation and I recommend that you speak to a local independent mortgage broker who can review the figures involved and advise you of the best way to proceed.

Peter

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