Mortgage transferral

If it wasnt legal for them to refuse, then *anyone* could get a mortgage, even people they would refuse due to bad debts or insufficient ability to repay, simply by transferring as you want. I'm sure the other party wouldnt object, why should they since there is no risk for them is there! Whats your problem, wouldnt you get one if you went through the application process?

The bank will want to ensure that the person the mortgage is being transferred to is able to afford the current mortgage repayment and will be continue to do so in the future. The only real way of doing this is going thru' an application procedure.

In message , - writes

Too right its legal.

I assume you have a joint mortgage and want one party to be released? Its not unreasonable for the mortgagee to check that the remaining borrower can support the application on their own account.

On this subject, does anyone know if it's possible to transfer a UK mortgage, say £200k, onto a new Spanish property which is being mostly rented out?

Obviously one wants a mortgage on the property on which there is rental income, to offset the two.

That is not necessary. Although overseas property lettings are assessed under Schedule D Case V, most of the Schedule A rules (including interest deductibility) apply.

So it is the purpose of the loan, not its method of security which is important. Therefore, if the loan was raised on a UK property to buy the Spanish property, you can claim the interest for tax purposes.

It is possible to transfer the purpose of a loan (taken out in say

1998) to buy a property bought in say 2004? How is it done?

I guess so.

Are there any mortgage lenders out there that _would_ transfer to one of the joint parties?

Obviously indeed. But you need to be more specific about what you mean by "transfer". You don't need to transfer the security for the loan from one property to the other, since it's the purpose of the loan, not what it's secured against, that determines its eligibility for tax relief. If you have an existing UK property with an existing mortgage, then the purpose of the loan in question will have been to buy the UK property. That won't qualify for tax relief against rental income.

If you have a pile of cash with which you plan to buy the rental property, then you should first use the cash to pay off (all or part of) the existing mortgage. Then you can take out a new loan, secured against the same UK property, and use that money to buy the Spanish property. Then the purpose of the new loan will have been to buy the rental property and so the loan will qualify.

If you've already bought the place, it's too late.

All of them would, but they'd all need to be satisfied that the new sole mortgagor would be a good risk, i.e. likely to be able to keep making the payments without help from the original co-mortgagor. The simplest way to satisfy them is to go through the normal application procedure. Why are you reluctant to do that?

Also, in all cases there will be legal formalities involved (and hence fees to pay), since the original mortgage deed will need to be discharged and a new one put in its place. This would not necessarily count as "redeeming" the mortgage in the sense that would give rise to early redemption charges.

As has been explained, you can increase the borrowing secured against the UK house, and use the money to buy the new one. That way the purpose of the loan is the purchase of the new property.

I think you can do this even if you've just used a pile of cash to partially pay off the first loan.

This gives the double advantage that not only can you set the interest (of that part of the loan) against rental income, but also, assuming the UK house is used as your main home and is not rented out, that the interest you pay on this loan is at the "normal" mortgage rate, not at the inflated buy-to-let rate. As far as lenders are concerned, the rate charged is not dependent on the purpose of the loan but on the quality of occupation of the property against which it is secured.

Example: UK house worth £250k, existing mortgage £50k (possibly after using spare cash to reduce it, so that none of this spare cash directly funds the holiday home). Spanish house to cost £100k.

Increase mortgage from £50k to £150k (i.e. borrow £100k and use this to buy the new house). You will now have a £150k loan of which

2/3 of the purpose was for the new property and 1/3 for the old. Accordingly you could set 2/3 of the interest against rental income.

In message , John-Smith writes

The property which is subject to the mortgage does not determine if you get tax relief on the interest, it is the purpose to which the borrowed money is put which determines this.

You cant 'transfer' any mortgage in the way you suggest. What you are really asking is can you obtain a £220k (sterling) loan secured on a Spanish property. Some banks may look at it, but not on domestic mortgage terms.

In message , - writes

I dont know what you man by 'transfer'. You seem to be suggesting a remortgage to new lender involving a transfer of equity to sole name Just about every mortgage lender I can think of will do this. You will have o apply from scratch of course and the lender will perform its normal credit checks on the sole borrower. If you dont want any check then that is a 'non status' loans which only a few lenders will do and they are very expensive and you need to have a low loan to value.

OK - there's a joint mortgage, which has obviously been a great deal paid off. I mean can the remaining mortgage payments be transferred over to one of those parties. Well, actually, as I've established with the mortgage lender, it can't, but I'm wondering if there are any other mortgage lenders who in this situation would. It seems a pretty straightforward affair to me.

It seems you don't know what you want, or aren't expressing it very well. Will the two parties remain co-owners of the property? Will they both continue to be responsible for ensuring the rest of the balance gets paid off in due course? Are you simply wanting the payments to be taken out of a different bank account (e.g. hers instead of his, or vice versa, or his or hers instead of a joint account)? That should be no problem.

But if one of them wishes actually to be absolved of responsibilty for making all future payments, i.e. wants to rescind the promise they made when giving the mortgage, then (a) the lender will need to be satisfied that the proposed new sole mortgagor can afford the burden on their own without help of the other, (b) the existing mortgage will need to be discharged and replaced by a new one given by the remaining sole mortagor, and (c) joint ownership of the property will need to be split asunder since a mortgage given by an incomplete set of owners is of no use to the mortgagee.

That's a tall order.

In message , - writes

Thats a remortgage with a transfer of equity. I assume the ownership passes to just one of the parties as well. Just about every lender I know will do this, but they will need to check on the remaining borrower first.