Selling propoerty to Spouse

[Cheesey]

Hi All

Although I've been reading these forums for a number of years this is my first post!

To give a little background....... I was self employed for a number of years and although I did okay, the money wasn't great. The most recent recession pretty much wiped me out and although my debt was manageable prior to this, it soon became a monster. Going against all the knowledge I have gained from these forums I stupidly allowed many of them to default and a number escalated to CCJ's.

I have now been back in full time employment for 2-3 years with a good salary and things are going well and am chipping away at the debt. I now want to switch mortgage products as I am still on my old self-cert mortgage with a high(ish) interest rate. I've spoken to my existing lender, Bank of Scotland, and they are happy for a product switch - it will save me £190 per month.

We've extended and renovated our current property and have a reasonably nice equity in it. I would like to release some of it to clear all my CCJ's and rebuild my credit rating. The trouble is to increase the amount of my mortgage means a new application, even with my existing lender - an application I will fail due to my credit rating.

So the question is can my wife buy the property from me? She has enough income to be granted the mortgage amount and has a good credit rating. The 2nd question is can I sell it to her for the outstanding amount of my mortgage plus the extra I need to pay off the debts - this would come to about 25% less than its real market value? She doesnt have the required income to get a mortgage for its true market value.

Many thanks in advance for any help/advice.

[Snoopy1948]

Re: Selling propoerty to Spouse

Hi Cheesey

You don't mention specific figures here but am I reading this correctly that your wife is not party to the current non status mortgage?

I don't see this as an actual need to sell the house to her ( I am assuming it's currently in your sole name ) and surely that would complicate things for the future. I see this as more of transfer of equity to your wife alongside her refinancing the whole package as you suggest. Have you considered jointly refinancing the house, surely that would be more practical, if I am reading this correctly.

Frankly, I would make an appointment to see an IFA and pay him for his time to achieve an honest appraisal of what you can and cant do here. For one thing, if you simply refinanced with the current lender away from the non status mortgage, then you would have immediate improvement in cash flow to deal with other debts although from what you say these may not be insubstantial.

One thing I can say ( I worked in financial services for several years ) is that remortgaging to consolidate other debt is never a good idea, unless you have a gun being held to your head! IT may look good on the current low interest rates but the future is unpredictable.