Transfer of equity question is this legal?

[magsmay]

For reasons not pertinent to the question, I am transferring my half of equity in the family home over to my husband. There is no mortgage on the property at the moment but when it is in his name he will be mortgaging it for around 20% loan to value. It was originally going to be for zero consideration but I am now not willing to sign over what is in essence my largest asset. I would like to put into legal wording what we would like to do in the following respect: I will transfer my half of the equity for 50% of the market value but no money will change hands. Should, for any reason which could include sale of said property or breakdown of marriage, I want my money back from my husband, then it will become payable on demand at 50% of the then current market value less any mortgage still repayable. I need a statement or contract using legal terms - also would this be a do-able contract? We are both seeing our Solicitors within the next few days but want to present our wishes succinctly and hopefully within the parameters of the Law -can anyone help please?

[cassa333]

Why doesn't your husband just get a 40% morgage on his half of the house?

[VHG]

>>>>Why doesn't your husband just get a 40% morgage on his half of the house?

Because I assume it is in joint names so if he gets a mortgage on the house it is on the whole house not just his part.

If they split the ownership of the house in two (half each) as the poster wants to do I assume he can get a mortgage just on his part.

If he then defaults the poster will not have to sell her half to pay off the mortgage.

I have to say it all sounds very dodgy and I am not sure I would let my wife take out a mortgage on what is my biggest asset, my house, even if we had split the equity.

[Graham-W]

If you changed the ownership from "joint tenants" to "tenants in common" I think he could then take a mortgage out on his half of the property.

[Barmaid]

Yes I think it is do-able, but it won't be easy. Without giving it too much thought, there are two ways you can do this. One is a declaration of trust stating that your husband is the sole beneficial owner but if the house is sold or you separate you get an interest. I foresee that presenting a problem to the mortgage company though.

The alternative is for you to transfer the property to your husband absolutely, backed by a separate agreement he will execute a legal charge in your favour for 50%. He then gets the mortgage (as first legal charge), you then take the second legal charge. That way, the mortgage company are not in anyway prejudiced.

[magsmay]

thankyou very much for all your replies.

@Barmaid -your help has been invaluable -your second alternative is just what we are looking to do so I can now explain to my solicitor in Legal Terms what I require. Thank you for taking the time to answer .