Can I sell my house to my spouse whilst I am in debt.

[Henryhatter]

Hi all. In the past my OH has not been in a position to get a mortgage. My mortgage is in my name only. I am in a lot of debt and although I have managed to stave off debt collection with the help of this site, I always worry about the possibility of charges on the property. My OH has recently changed jobs with a much better salary and is in a better position with regard to obtaining a mortgage. I have half of my original mortgage to pay. Can I sell to him for what is left to pay on the mortgage? I have tried to research this and come across something about the fact that if I was eventually made bankrupt this could be contested. Any help appreciated as always.

[PlanB]

Re: Can I sell my house to my spouse whilst I am in debt.

You can sell your house to whomever you want in theory, as long as the price paid is enough to satisfy any outstanding mortgage on it. But there are things to consider before you do that.

If you think you will be made BR in the next six (?) years then it may be seen as deliberately distancing your capital/assets and could be clawed back. On the plus side if you stick with AAD that's unlikely to happen.

When your hubby buys it from you he will have to pay Stamp Duty on the purchase just like any stranger purchasing your property (under £125k is exempt). HMRC may not be happy if you sell a property deliberately below the SDLT threshold to avoid the tax. I would need to know the figures involved. There will be legal fees too.

If you and your husband ever divorce (God forbid) then who gets to stay in the house could be an issue once you no longer own it.

Have you considered joining him onto your mortgage as another option? If you're finances are not brilliant your lender may be only too happy to have the added security of your husband's income to rely on.

If you have a joint mortgage on a jointly owned property you'll find that if any creditor went after you for a Charging Order it would only be a Restriction so (hopefully) no Order for Sale. Also when the property is eventually sold the creditor can only take what's owed from your share of the equity. If you get the right lawyer I'm told it's possible to escape paying anything to the creditor when sold if only a Restriction is registered at Land Registry.

This might be a compromise and a good shield against creditors for you. Then when things have stabilised you may want to 'sell' it to him with a whole new mortgage in his name if you don't think he's going to run off with your best friend

I say all this not as a mortgage advisor but as an ex-wife who kissed goodbye to a fabulous thatched cottage when I got divorced because it didn't have my name on the deeds and I couldn't prove I'd paid towards the mortgage

[Henryhatter]

Re: Can I sell my house to my spouse whilst I am in debt.

Thank you for spelling the above out. That is really helpful. I am going to look into getting him on the mortgage rather than selling it outright. What originally worried me about that is I am no longer working full time and my husband pays the mortgage now. I thought the mortgage company may want to reassess my financial situation which may leave me in a worse position should for any reason, they decline my request for a joint mortgage.


I have been married for 30 years and the thought that he may leave me hadn't entered my head. However, your post has made me rethink that. We never know what could happen. So I will look further into the joint mortgage option. Thanks again.

[PlanB]

Re: Can I sell my house to my spouse whilst I am in debt.

Oh dear I didn't want to plant any negative thoughts in your head about divorce. If you've put up with each other for thirty years I'm sure you'll grow old together

I'm studying family law at the moment so I'm naturally a bit cynical because in the cases I'm following the vow "till death do us part" could actually mean one spouse will murder the other one if the court doesn't solve the financial battle between them soon

So while we're on the depressing subject of splitting up I should also mention the need to look ahead at either party remarrying and what would happen to the house if the new wife/husband wants to moved in leaving the other one out in the cold.

Or what would happen with inheritance issues if there are children involved. You may not be able to leave your share of the house to your children if you don't own it. I don't dare mention the problems with Wills contested by the next generation.

I do hope I haven't ruined your Sunday afternoon so that you and your husband row all night which will be be all my fault

[PlanB]

Re: Can I sell my house to my spouse whilst I am in debt.

I am going to look into getting him on the mortgage rather than selling it outright. What originally worried me about that is I am no longer working full time and my husband pays the mortgage now. I thought the mortgage company may want to reassess my financial situation which may leave me in a worse position should for any reason, they decline my request for a joint mortgage.

. . . . So I will look further into the joint mortgage option.

Don't do anything about a joint mortgage yet. You need more information and research first. I'm sure others will chip in.

I can't see how the lender could take away your mortgage if the payments are all up to date. It's none of their business where the money comes from. Plenty of parents pay their children's mortgage. And I'm told there are sugar-daddies out there doing it for their mistresses. The mortgage lender is a business so as long as it doesn't involve money laundering they will take whatever money gets paid to them.

What I don't know is whether you would have to go through re-underwriting which may depend on the mortgage provider since they don't all have the same lending criteria.

I wasn't suggesting you should take out a new joint mortgage product, I was suggesting you could explore the possibility of adding your husband onto the existing mortgage.

[Henryhatter]

Re: Can I sell my house to my spouse whilst I am in debt.

Thanks PlanB. What I was thinking was that if I asked my current mortgage company to put my husband on my existing mortgage, they may treat it as a new product and I would then be reassessed financially. With my debts there is not a hell's chance that I would be granted a mortgage. Or whether, they simply assess him and add him to the existing arrangement. I would need to look into what their policy is before I approached them.. This is why I asked about the whether there was anything (legally) stopping me from selling the house to him whilst I am in such debt. The main reason as stated is to avoid a charging order in the future.

It did start off a bit of tension here when I asked my husband what would happen if I sell him the house and he runs off with someone in the future. When he answered, “you never know”, I told him I would not listen to such talk haha.

[Henryhatter]

Re: Can I sell my house to my spouse whilst I am in debt.

Thanks PlanB, I really appreciated the help you are offering.