I’m assuming that it’s within the lending contract that I must notify the bank when I’m doing anything – including wrapping it to someone else.
Just wondering what the bank will say when I notify them, will they approve it or deny me doing it? I’m assuming it’s a major event as the names on the title of the property change over to the people I’m wrapping into it (correct me if I’m wrong on this point), so I’m wondering how it all works with the bank, if it will work.
Wow Brizza just stop right there.
The title certainly does not change into the purchasers name as otherwise how would you be able to raise funds against a property that is not in your name.
What happens is they enter into an Instalment Contract and make a series of payments normally over say 30 years which reflect sufficient amounts to repay the purchase price plus interest over that time.
The Transfer Form is also signed and depending on which State the property is based will pay stamp duty against that Transfer assessed against the instalment contract purchase price.
Title remains in the original owners name until such time as the purchasers either refinance or make their last instalment payment.
As security the purchaser has the right under the Property Act to register a caveat against the property to avoid it being sold with their proper consent or lnowledge.
On the funding side the majority of Banks will not allow the property to be wrapped and therefore if you request their permission it will be denied.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks for your response.
If I wrap a property to someone, are they eligible to receive the FHOG and if so, how does this work if the property remains in my name?
And this may sound like a stupid question, but if the banks do not allow you to wrap, how do people do it? Is it done through financiers that will allow wrapping or is it done without notifying the bank?
Yes the purchaser is entitled to receive the $7000 FHOG but the timing of the payment varies from State to State.
Unless you have a very good rappor with your Bank then they are usually done as IP’s without the Bank knowledge. In saying that there are 1 or 2 non mainstream lenders that accept wraps.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks again for your response.
If I chose not to disclose the information to the bank, is there anyway that they can find out?
During the contract of sale between the wrapper and the wrappee, does the OSR notify the bank of anything during the time of stamp duty processing?
No the OSR has no interest other than merely collecting your Stamp Duty.
If a caveat is registered by the purchaser you the owner of the property are notified but not the mortgagee.
The only thing to make sure is that your loan is always P & I not interest only and never X collarise the loans. It is a breach of the Property Act.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks for your help Richard.
Much appreciated.
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