Transfer of Equity

My parents are divorced and they have a property in joint name. My father wants his 50% share of the property and my mother is unable to buy him out for 2 reasons – she has bad credit (CCJ) so no one will lend her money and also because she is retired now.
We are looking into a transfer of equity – where my mum transfers her share of the property to her sons, so the sons can raise a mortgage to buy out the father’s interests from the property. So the property will no longer be in the name of the parents, and the sons will take on the mortgage payments.
However, my mother had a taken out an in secured loan which she’s been unable to keep up with payments. This loan has now been made secured and charged against the property in my mum’s name. I wanted to know if this will have any impact on the transfer of equity to the sons and if so how we can overcome this. If the transfer of equity goes through – we would release some of the equity to pay of my mother’s loan which has been charged against the property and also buy out my father’s interests. Can anybody advise?

She hasn't made life terribly easy for anyone! The property will have to be transferred to the sons in its entirety. The sons will have to raise sufficient to pay out their father and cover the mortgage and the loan. So the real question here is whether the sons can actually afford to become responsible for the loan, the mortgage and paying out their father.

Whatever is done, there should be a consent order in the divorce proceedings so that neither party can come back at a later date asking for further provision from the other.

Hi Jonathancj,
Thank you for your prompt reply.
Yes the sons are both in full time employment and earning enough to take on the mortgage and buy out my father’s share and cover the mother’s loan. There’s enough equity in the property to raise the sufficient funds needed and with our combined incomes we can afford the mortgage payments.
My only worry is if the charge against the property will have any impact on my mother being able to transfer the property? Also do I need to engage a solicitor for this transfer of equity or would this be done by the building society that the current mortgage is held with?
Kind regards
Rising

Hi Rising

I am doing a TofE now, from joint names to sole name & you can either use a seperate sols or the Building society Sols (I am using BS sols). I am told is should cost no more than 500-700 to do fully, having already spent £150 on securing the offer from the BS for the morg in my name.

In terms of the secured loan, perhaps it would be better to pay this off 1st if possible so it doent hinder the proceedings & then repay it with the equity released in the morg? Not sure on that one - sorry.

JJ