I am a guarantor to house I thought was mine?

by Readers Question

9:31 AM, 8th April 2016
About 3 years ago

I am a guarantor to house I thought was mine?

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I am a guarantor to house I thought was mine?

I’ve been trying to get a new mortgage to cover existing mortgage (£35,000), add extension, funds for refurb and lastly deposit on BTL in Eastbourne, total required about £140,000.parents house

Through this I’ve discovered I’ve only been a guarantor to the parents mortgage for 15 years.

Nat West are the only bank willing to give me the money and let my parents continue to live in the house, and of course only if we transfer the deeds into my name! They were persuaded to not force a 6 month delay in handing over the money, which is normally applied to ensure money laundering, or similar, isn’t occurring.

However they said I’d have to purchase the property, and the solicitors could transfer the money immediately back to me, the drawback is having to pay stamp duty at a cost of £10,000 on a property on which I’ve paid the mortgage for 16 years!!!

So I thought I’d borrow the existing £35,000 as a loan from Barclays and pay off the mortgage, then transfer the deeds into my name by gift from my parents, then get the Nat West mortgage and then pay off the loan.

Nat West are saying they won’t do this and that I must purchase the property.

Any advice please?

David



Comments

Howard Reuben CeMap CeRER

10:33 AM, 8th April 2016
About 3 years ago

Hi David

It's a bitter pill to swallow I know, but Nat West are correct. It is irrelevant that you have been paying the mortgage for 16 years, the fact as far as the Land Registry is concerned is that you are not the owner of the property.

The strategy you have told them (re a loan and then a gift) is likely to have been noted that you wish to use a method to avoid tax (in this case, stamp duty land tax).

As your parents live there, so if you were to take ownership, your mortgage requirement now (ie as from 21st March 2016) falls under the new EU imposed MCD rules and you would be obliged to take out a Family Buy To Let mortgage (standard BTL mortgage would not be available) and this is now down to affordability rules and usually now on a capital repayment basis.

However, that's as much 'generic' information as can be published without a personalised Fact Find conversation held and an authorised and qualified Mortgage Adviser being able to provide specific direction. It would also be useful for you to take tax advice as well to determine the stamp duty costs based on the 'value' that the house is sold to you.

There may be options for you, but a Fact Find discussion is your first step.

Our team of Advisers are available to assist if required. See my profile link for details.

Hope this helps.

Howard

Michael Barnes

16:05 PM, 10th April 2016
About 3 years ago

why did you think you owned it?

Did some professional screw up originally, or was it your error?


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