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Odd question! - Need Expert Advice

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  • MortgageNoob
    started a topic Odd question! - Need Expert Advice

    Odd question! - Need Expert Advice

    Hi there,

    Bit of an odd question I could do with some expert opinions on!

    I’m currently living with my long-term partner in a house valued at around £130k, we are in the process of decorating it head to toe at the moment with the aim to sell it – which is likely to take 2-3 months. The house is in her name only and she has owned it for 10 years on her own and built up good equity. The mortgage is through Nationwide and is a variable rate.

    I’ve saw a house I really like valued at £200k and would like to buy it, however, it’s going to sometime before my girlfriend’s house is decorated and ready to go on the market. My worry is that the house I like will sell before we are ready to put an offer in.

    So… I have an idea and need to know if it’s a good and practical or not! Firstly, let me say, I have never owned a property, so will be a first-time buyer (assuming no stamp duty?). Could I get a mortgage out in my name only and buy the house (might be able to make a good offer as I would have no chain). Then once my girlfriends house sells, could I add her name jointly to the mortgage and move all of her equity over to the new property?

    Not sure if this is a possibility, and if so, if it will end up being considerably more expensive?

    Also, would there be more solicitor fees than usual doing the buying of the new and selling of the old separately?


    Thanks for your help in advance!
    Last edited by MortgageNoob; 18-02-2019, 10:37 AM.

  • Lilla D
    replied
    Hi there,

    Just seen your question and although you have probably found the answer to your questions, I thought I'd reply anyway, as someone else reading your post may be in a similar situation.

    If you're a FTB and have enough income, etc. you could possibly buy the property in your name only and not pay stamp duty, as it's below the £300k limit given to FTBs.

    You could even add your girlfriend and reduce the mortgage balance as per your suggestion, but it comes with a few caveats:
    - when you add her to the property, technically she will buy a portion of the property, so she could be subject to stamp duty payment;
    - at the same time, you will technically sell your portion of the property, which may have tax implications, so you may want to speak to an accountant about it;
    - if you wanted to reduce the mortgage amount by more than 10% of the balance, then most mortgage deals would charge you a penalty called early repayment charge. You could possibly avoid it by choosing a mortgage deal with no penalty or restrict the overpayment to 10% per year (a few lenders allow max 20%) or take an offset mortgage deal

    Re your question about solicitor fees - in the scenario above, you'll pay for the normal sale and purchase fees and you'll also pay for the transfer of equity (when you "sell" some of share to your partner) related costs. I wouldn't call it "considerably more expensive", but this is a relative term...

    Hope the above helps you or someone else reading this chain.

    Lilla


    Whole of market independent mortgage broker in London. We advise on mortgages UK wide including London, South East and as far afield as Scotland and Wales.

    Leave a comment:


  • amey23
    replied
    Hello

    Please give me a call on the number below, I would be more than happy to discuss this with you in more detail.

    01908 666466
    07525371226

    Thanks
    Amey Sinfield

    Leave a comment:

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