Advise please. Recently separated from my wife and am currently dividing the PPOR. Im happy to buy my (ex) wife out of her share of the property (which she has agreed to) however the bank (Westpac) states I need to do a new home loan (which they have now unconditionally approved) to get the loan solely in my name.
Problem is, new loan, new interest rate and new fees and charges. Westpac have agreed to wave most fees (but payble if pay the loan off within 4 years) BUT have jacked up the interest rate from my current fixed 7.79% (fixed 4 months ago for 3 years) to 8.89%.
Anyone see anyway around this? I have asked to speak to mortgage retention but they will only match other banks current offers, which at this point in time is no where near 7.79%
Im affraid if I cant reduce this to near what it was Ill be forced to sell and rent!
Any advise appreciated
Hi Stuck@two.
Sorry to hear of your situation – difficult time I'm sure.
Now, as for Westpac – and any other lenders – this is standard stuff. THe property has to be transferred, and of course the loan is then no longer valid, as it is for a property that has 'changed hands' – ie no longer belongs to the same borrowers. With a court order/via solicitor you will avoid the stamp duty on transfer, but there is no way around the loan payout and reestablishment issue.
Don't take this the wrong way, but it sounds like your lender is doing all they can to help if you are getting fee concessions etc, and also bear in mind that even if this was'nt going on for you, when your fixed interest loan finished it's term, you would be in exactly the same boat…..
If the bank 'assess's ' you as being able to afford the loan, it will then be up to you to decide if you really can.
That said, bear in mind many feel interest rates are at the top of their cycle, so it may be more advantages not to fix all your loan at present. If you do, and if you want to jump banks you would no doubt be entitled to an introductory rate loan – one bank is offering fixed for 3 years 8.59 at present.All the best.
I agree. You are buying someone's half of the property, so you will need a new loan to do this. Maybe you could try to ask if they can keep your 50% portion of the original loan at the same rate?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry. Great idea. Have contacted Westpac and I'll let you know how I get on.
Well, Westpac had no interest in the proposed solution, even as a good will gesture, however they did come back saying they could drop the rate to 8.49%, (from 8.89%) as this is what is on offer at Bankwest at the moment (matching price). Still there are other things like a $900 deferred settlement fee and other fees applicable to the new loan that arent in the old loan.
Let me add some more spice to this forum post. Is there any way to get my wife off the mortgage without refinancing? My solicitor says we can not change the title to just my name, without the mortgage being in just my name.(and hence all the interest rate changes and fee changes) Is this true? In essense, I want to know if there (or what is the cheapest way) is a way to get my wife off the mortgage without the expense or interest rate change. Surely this happens all the time, and surely each time the parties arent force to do new loans with new interst rates and fees.?? (although i realise the stamp duty is waved)
Each person on the title must be on the loan, but sometimes a title can be in one name with the spouse on the loan as well.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Just thinking right outside the box with an really out there thought/ idea.
Turn PPOR into investment property
Ex – Wife owns half the house she earns half the rent
You earn the other half of the rentor
you pay ex – wife rent for 1/2 the house and live in it.you could always get an offer and acceptance/transfer for a sale three years into the future for full transfer to your name when the loan expires – you will be up for the costs then anyway.?
Make it for a fixed amount of her half (or 65% if you had a lawyer like me) plus the notional rental value of the half to allow for the time value of money. …just a thoughthaving said that sometimes is just easier to soak the costs and head overseas for a few years to build up tax free income…worked for me
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