A transfer of equity, often simply known as a ‘buyout’ or ‘buying someone out’, is a way to change or modify the ownership of a property. It’s common during divorce or separation, or in cases where one party wishes to be the sole owner and the other wishes to move elsewhere with their share. So, what happens during this legal process?
During the transfer of equity process, you’ll likely be adding or removing another party from the property title deeds. This is a legal transaction that requires professional assistance from a specialist transfer of equity solicitor, such as can be found at https://www.parachutelaw.co.uk/transfer-of-equity-solicitor, who can help it go smoothly and prevent any hiccups.
For your property to change hands, you’ll need to conduct a financial review of the property itself. You’ll need to assess the current outstanding mortgage, if you have one, and consider all the obligations faced by each party.
You’ll also need to stay in close communication with your mortgage lender throughout, as they will wish to assess the affordability of any party remaining on the mortgage. That means they might wish to run credit checks, take a closer look at your expenditure and income, and fully understand your financial position to be sure you’re eligible to take on a sole mortgage. Read about what steps you can take to boost affordability here.
The Legal Process
Your transfer of equity solicitor will assist with this. They’ll prepare the legal documentation to formally alter the property ownership, such as the Transfer Deed. This deed will set out all the details, names and ownership percentages of the transfer legally.
You’ll also need to think about tax implications, such as Stamp Duty or any other obligations that may be appropriate when changing ownership.