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Transferring property to Spouse/Family Member


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Hi guys so heres my situation - I want to pull out some equity out of my current residential property to get a BTL/do some work around the house, my mortgage renewal is coming up in October. My question is twofold will I be able to pull out money from my current property even if my current credit rating is terrible (started a business and the knock on effects of that)? Whether I renew with my current mortage provider or find a better one.

OR

Do I transfer my property to my wife, and utilise her better credit rating to get the above done? Also how long does it take to transfer a property, what are the costs involved (roughly/exactly)?

My other option is to save which will take me over a year to get the amount I need for BTL, which is fine but Covid is providing some nice opportunities at the moment and I would like to take advantage of this. 

First time property developer so please be gentle with me, I am sure my questions are dumb - appreciate all and any help/advice guys :)

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Hi Khuram

I'm not a broker so best speak to one, but I'll try to help.

Have you spoken to your current mortgage provider to see if you're able to take out the extra equity? This is most likely the most cost-efficient way of doing so. Generally, residential mortgages are lower in terms of rates. Not sure why your credit rating would be terrible if you started a new business, but lenders would normally look at your income and use a multiplier of it to determine how much borrowing you can afford. So, if your income is sufficient to cover the additional borrowing, should be okay.

In terms of transferring it to your spouse, not sure how it's currently owned, but you could be liable for stamp duty and CGT if it's just in your name at the moment and you're looking to transfer it to your spouse. If it's in joint names, then you can usually getaway with just a deed of trust. 

My suggestion is to contact your current lender first to see what they say. If they're not willing to let you take the equity, then speak to an accountant and broker. 

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