Transfer Equity | The Transfer of Equity explained

Below we take a closer look at the Transfer of Equity, along with when equity transfer might take place and how it works, and the Mortgage Lenders role in this process. We also investigate other options, and how Shire Direct can usually help even in the trickiest of circumstances.

Table of Contents:

What does Transfer Equity mean? Equity Transfer explained!

'So, what does to Transfer Equity mean then' you might be asking? Well, the Transfer of Equity (or Equity Transfer) will usually arise when a borrower is either:

Released from the mortgage, or
Added to the mortgage.

Most Transfers of Equity occur as a result of a breakdown between spouses or partners, or when a third party moves in with the mortgagor.

Sometimes there may be a request for a transfer of equity to avoid the consequences of insolvency, when a borrower may attempt to avoid his creditors by a Transfer of Equity to his wife (or partner). It is important to note that if there is insolvency action pending, there can be complications for the lender, as the Trustee in Bankruptcy could set aside the Transfer of Equity.

The Mortgage Lender and Transfer of Equity

The Mortgage Lender has the absolute right to agree or to refuse an equity transfer request. This is because the mortgage deed is binding on both parties to the mortgage contract on a joint and several basis. This means that each person will be bound by the mortgage contract until the loan is fully repaid, and neither party can just walk away from their contractual obligations.

A borrower wishing to be discharged from the terms of the mortgage contract will have to understand that:

the remaining party must be able to demonstrate that they alone can afford the contractual payments in accordance with the mortgage lender's underwriting criteria, or that they will be in a position to do so if a new party were to be transferred onto the mortgage; and
if it can be demonstrated that the remaining party can comfortably afford the contractual payments, that they are prepared to agree to the transfer.

In order to be able to come to a decision regarding any Transfer of Equity, either on or off the contract, the lender will have to carefully and rigorously assess the new circumstances to ensure there is the ability to repay the contractual repayments.

The lender may also be particularly interested in the credit status of applicants to remain on the mortgage, and will check for any signs of impairment that may indicate potential problems relating to future repayment, as well as the track record of previous payments.

Would Remortgaging be a better option than Equity Transfer?

Once relationships breakdown, there is often a degree of acrimony between the parties, with resulting missed mortgage payments. Or it may be that the existing lender is inflexible, whereas an alternative mortgage provider may be more than happy to accommodate the transfer of equity.

In our experience, we have found that considering a complete remortgage will often be a more appropriate solution, for one or more of the following reasons:

Switching to a preferential rate
Raising additional capital
Accommodating any credit difficulties that the existing lender is reluctant to consider
The relationship with the present lender has been soured

Can Shire Direct help me if my present lender has refused to allow the Transfer of Equity?

Usually, yes we can!

As specialist mortgage brokers, we do have a range of schemes to help, even in the trickiest of circumstances! So, do give us a call if you think you may have difficulties, as we can often arrange mortgage funding where others fail!

Shire Direct is authorised and regulated by the Financial Services Authority, and we will provide you with advice and a recommendation on a mortgage product drawn from our extensive portfolio of lenders and plans contained within our lender panels that are designed to cover your requirements, needs and aspirations - whatever your circumstances.

Today's mortgage marketplace can be extremely complex, and choosing the right mortgage for you can seem like a daunting and overwhelming task with so many different products and terminology, it's hard to know where to begin! That's where Shire Direct can really help. Our lender panels are geared to provide a comprehensive selection of schemes to enable us to be able to provide the most appropriate mortgage product for you. We are confident that you will find our approach to be both slick, and pragmatic. We'll provide you with a rapid in-principle decision, and we work in close conjunction with the mortgage lender, solicitor and property valuer to ensure we achieve a suitable offer of mortgage as quickly as possible.

We've a great product range!

There's a tremendous range of mortgage products in the marketplace these days, and our lender panels provide our customers with a wealth of choice, including:

And a wide variety of circumstances we can often help with!

Our lender panels provide us with an extensive range of plans to accommodate most circumstances, including:

That concludes our look at the Transfer of Equity, would you like more information, and a rapid in-principle decision?

So that wraps up our article on the Transfer of Equity. If you would like further information and a rapid in-principle decision, then call us today on Freephone 08000 282 281 (lines open from 8am until 10pm everyday - including weekends). You'll find our service to be friendly, yet professional, helpful and not at all stuffy. We have the approach, the skills and the products to help even in the trickiest of circumstances.

Alternatively, you may want to enquire online instead, it's quick and easy, and you can do it at any time of day or night!

In either instance, we'll carefully assess your circumstances, needs, requirements and aspirations, so that we come up with just the right mortgage product for you! So why not Contact Us today, you'll be glad you did!

We hope you found our look at Equity Transfer and how the Transfer of Equity works to be helpful. You'll find much more useful mortgage related information throughout the pages of our website, and don't forget we're only ever a free telephone call or couple of mouse clicks away and would love to hear from you and help in any way we can!

Enquire Online now, or call us today 08000 282 281 - our freephone lines are open 8am-10pm everyday! We'd love to hear from you!

The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.

There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.

THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Adding existing debt to your mortgage will increase the repayment term and overall cost.

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Equity Transfer: How Transfer of Equity works, other options and how Shire Direct can help!