There are a number of processes and factors involved when you are dealing with property. Whether you are the buyer or the seller, you need to do a bit of research on a few things before you actually start looking for a property. Conveyancing is one such process. Transfer of equity is another.
Today let us look into what transfer of equity is, why it may be necessary for you and how to get through the process conveniently. This should article give you a brief idea on the process and help you get through it smoothly in the future.
What is transfer of equity?
When there is equity associated with a property, the change of ownership of that equity is termed as the transfer of equity. There can be various reasons for initiating such a transfer.Basically, when a property owner is able to work themselves out of the mortgage on their property, they need to go through this process.
The transfer may take place when the collateral associated with the mortgage has been freed. The property owner will also need to initiate this process when they add a new mortgage on a property.
Why go for an equity transfer?
Ideally, there are three to four scenarios when a property owner needs to initiate an equity transfer. First of all, the person may be adding a partner to their existing mortgage, which generally occurs in case of marriages and business alliances. The individual assets of the partners are combined in such cases.
Secondly, there may be a situation where two partners associated with a mortgage want to separate. Such a situation may arise after a divorce or a disagreement between two business partners.
Thirdly, two or more parties may want to cancel the combined mortgage when there is a problem between the partners. Fourthly, if the mortgage requires more assets than a person has already associated with it, then they may want to add another partner to it.
There can be other financial reasons as well when a partner may want to opt out of an existing mortgage.
How does the process work?
The process of transfer of equity is quite simple. Once the parties are ready to join or separate from a mortgage, they need to sit down together, formulate and agree to a few legal documents, also known as transfer deeds and have a witness to vouch for the whole process.
It is a good practice to initiate and go through this process in the presence of a solicitor specialised in such cases. In cases where an outstanding mortgage amount remains, the party who is getting the ownership transferred to their name needs to re-mortgage or apply for a second mortgage. The released party sees no more obligations with the mortgage once the transfer has been completed.
Looking to work with a solicitor
When you are looking to work with a professional and experienced solicitor to help you through the process, there are a couple of things that you need to consider. Firstly, always choose to work with a professional that has enough experience in handling cases related to transfer of equity.
Secondly, consult websites like Best Conveyancing Quotes to understand the actual costs involved in the process and whether the solicitor is charging you more than what they should be.
John is a short stories author as well as a regular columnist on various blogs specialising on finance. John shares a brief discussion on transfer of equity in today’s article.