Separating two properties in joint name

[HenryD]

Hi, looking for some advice please!

My sister and I jointly own two houses and live in one each (we released equity in the first to buy the second). My partner and I now want to buy together, and need to be clear of these responsibilities before we can do so. Both houses are about equal in value to the outstanding loan, both trackers, one with PTSB and one with Bank of Scotland.

We would like to sell one house and transfer the other into my sister's name alone. She can afford the payments on the remaining house.

We hope to do this as simply and cheaply as possible. Since there is no profit to be made from a sale at present, can we simply sell one of them and then I release my interest in the other? Or would she 'owe' me for half the market value?

Or failing that, can we virtually 'swap' our interests in the two houses so we are each responsible for one, or would that require each of us having the cash to buy each other out?

And looking at other threads it appears we would be looking at some stamp duty issues whichever way we do this...

Would appreciate any guidance as we don't know whether we should be approaching a solicitor or our mortgage lenders to get this process started.

Many thanks.

 

[Bronte]

Firstly your sister needs to ask her bank if they will allow her to repay the mortgage and release you. To me this is a new mortgage, and could be expensive, especially if she has a good tracker.

Swopping won't work. Sell one house and that solves that house outright. No issue tax wise as you say there is no profit (if there's a loss you can carry it forward, but it's a bit tricker because one of you is living in it as a PPR so then there may be no recognisable loss)

The house she wants to keep, is it in NE, if it is, she is not profiting? Do you want to post up figures on each house, it makes it easier to understand what is going on.

 

[Lucuma]

can we simply sell one of them and then I release my interest in the other? Or would she 'owe' me for half the market value?

If you sell say the house you live in, from what you say the mortgage will be cleared. So that's that one nicely tidied up.

That leaves you with your sister's house. Best bet there is to download the form for 'Transfer of joint to single mortgage'' from the bank's website and fill it in. If it's the PTSB one, I'm (all too) familiar with the form, if it's the BOS one I wouldn't know but they surely have a similar form. On that form you would simply sign it and your sister has to get a certificate of income filled in and stamped by her employer and a few other bits and pieces like bank statements for the last few years etc. Put it all together and send it off to the bank for assessment. See what they come back with. Best case scenario, based on the fact that your sister is no longer named on any other mortgages (because ye sold the other house) and the fact her house is not in negative equity, maybe the bank will simply agree to transfer it into her name and let her keep the tracker in the process. That is the most straightforward solution.
So try that first. If that doesn't work, come back on here and we can tell you the other options.

 

[Brendan Burgess]

Hi Henry

Which house does your sister want to live in? The Bank of Scotland or the ptsb one? Or does she not mind?

This is very important.

Brendan

 

[HenryD]

Hi all, thanks for the replies.

The house she wants to keep, is it in NE, if it is, she is not profiting? Do you want to post up figures on each house, it makes it easier to understand what is going on.

Both houses are marginally in NE, but by very little. Amount outstanding and recent valuations are 190k/185k and 180k/175k for both houses. In a month or 2, they'll both be breaking even.

If you sell say the house you live in, from what you say the mortgage will be cleared. So that's that one nicely tidied up.

That leaves you with your sister's house. Best bet there is to download the form for 'Transfer of joint to single mortgage'' from the bank's website and fill it in. If it's the PTSB one, I'm (all too) familiar with the form, if it's the BOS one I wouldn't know but they surely have a similar form. On that form you would simply sign it and your sister has to get a certificate of income filled in and stamped by her employer and a few other bits and pieces like bank statements for the last few years etc. Put it all together and send it off to the bank for assessment. See what they come back with. Best case scenario, based on the fact that your sister is no longer named on any other mortgages (because ye sold the other house) and the fact her house is not in negative equity, maybe the bank will simply agree to transfer it into her name and let her keep the tracker in the process. That is the most straightforward solution.
So try that first. If that doesn't work, come back on here and we can tell you the other options.

That all sounds a bit risky though! We need to sell the first house, and then hope the bank agrees to our request on the second? If they don't agree, are left in no-mans-land?

Which house does your sister want to live in? The Bank of Scotland or the ptsb one? Or does she not mind?

I think that she's open on this. We had thought that it would be best to restructure the BoS mortgage and sell the PTSB one. That way, we could try and bring the PTSB tracker with us when we buy the new house. We're open to suggestions on this though!

 

[Brendan Burgess]

Step 1 (although these steps may have to be taken together)
Your sister tries to get the Bank of Scotland mortgage in her name. This will allow her to keep the tracker. And she is happy to continue to live in the house.

As Bank of Scotland want to exit the country, they may well refuse.

Step 2
ptsb allows a tracker mortgage to be ported to a new property while retaining the tracker at an increased margin of 1%

So apply to ptsb for Approval in Principle to transfer the mortgage into your sole name and onto a new property. To achieve this you will have to have sufficient income to sustain the mortgage in your own name.


Do you have the income to be approved for a bigger mortgage on your own? If so, go for that and don't complicate it by buying with your partner.

Trackers are extremely valuable. If you don't have the income to trade up, then you should consider living in the ptsb property until your circumstances allow you to trade-up.

BoSI will be the more difficult to deal with. So you should probably talk to ptsb first. See what they are willing to agree to. They may not allow you to put the property into your own name while you are a joint mortgage holder on the other property. They may give you a conditional letter, saying that they will allow your sister off the mortgage if BoSI allow you off the other mortgage.

If BoSI don't cooperate...
Then your options are
1) Sell the BoSI property
Your sister will take over the ptsb property and mortgage
You and your partner will have to buy a house with an SVR mortgage without any tracker benefit.

2) Your sister stays in the property she prefers
You and your partner live in the other property
Await developments (E.g. BoSI may introduce an incentive to exit tracker mortgages early)

3) Your sister stays in the property she prefers
Let out the other property - it will be very profitable as it's a cheap tracker and not in negative equity.
You and your partner rent a home together.

 

[dereko1969]

Is there no way you and your partner could live in one of the houses and transfer ownership of that one into your name and the other one into your sister's?

 

[HenryD]

Step 1 (although these steps may have to be taken together)
Your sister tries to get the Bank of Scotland mortgage in her name. This will allow her to keep the tracker. And she is happy to continue to live in the house.

As Bank of Scotland want to exit the country, they may well refuse.

Step 2
ptsb allows a tracker mortgage to be ported to a new property while retaining the tracker at an increased margin of 1%

So apply to ptsb for Approval in Principle to transfer the mortgage into your sole name and onto a new property. To achieve this you will have to have sufficient income to sustain the mortgage in your own name.


Do you have the income to be approved for a bigger mortgage on your own? If so, go for that and don't complicate it by buying with your partner.

Trackers are extremely valuable. If you don't have the income to trade up, then you should consider living in the ptsb property until your circumstances allow you to trade-up.

BoSI will be the more difficult to deal with. So you should probably talk to ptsb first. See what they are willing to agree to. They may not allow you to put the property into your own name while you are a joint mortgage holder on the other property. They may give you a conditional letter, saying that they will allow your sister off the mortgage if BoSI allow you off the other mortgage.

If BoSI don't cooperate...
Then your options are
1) Sell the BoSI property
Your sister will take over the ptsb property and mortgage
You and your partner will have to buy a house with an SVR mortgage without any tracker benefit.

2) Your sister stays in the property she prefers
You and your partner live in the other property
Await developments (E.g. BoSI may introduce an incentive to exit tracker mortgages early)

3) Your sister stays in the property she prefers
Let out the other property - it will be very profitable as it's a cheap tracker and not in negative equity.
You and your partner rent a home together.

Thanks for the detailed reply. We hadn't really considered option 1 - we've been quite focussed on keeping the tracker. I guess we just need to start talking with both banks to see what they say. We have someone we can call in PTSB; I'm not sure how to deal with BoSI. Their website asks people to deal with Certus, who only seem to look after arrears...

Is there no way you and your partner could live in one of the houses and transfer ownership of that one into your name and the other one into your sister's?

The issue isn't really the ownership of the houses - it's the liability on the mortgages. If we were liable for just one house, we'd be ok. As they're both joint mortgages, we're liable for both houses in the banks eyes.

 

[HenryD]

Thanks everybody for your help. Great site! Any other thoughts welcome of course. Will keep you posted if we get anywhere.