So I have a very n00b question for these forums.
I've just purchased a property to live in (and rent out 2 other rooms). My BIL or mother is going to go in on the loan with me to increase borrowing power.
I would be in charge of repayments completely, even if the loan is under both names. The 10% deposit is being paid tonight.
The question is – does the name on the property title need to be in the names of both people on the loan, or can it be just mine? And is it possible to change names on the title and/or loan at a later date?) There are tax implications involved for both parties – correct?
(I'm signing the contract tonight, and there's a 4 month settlement on this property, so hopefully I have a bit of time to sort this out!!!)
Many thanks!
Most lenders will require all borrowers to be on the title and yes you can change the names on the Title/Loan later but may incurr Tax AND Stamp Duty implications
Sorry i hate to disagree with Marjac but certainly the names on the Title and the loan can be totally different.
As long as you can persuade your lender there is some Financial Benefit for your mother to be a co borrower or Guarantor there is NO need for her to be on the Title.
They may suggest or insist that she gets independant legal advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Tax deductibility will usually depend on the names on title, not on the loan.
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
Hi,
Richard, your comment about proving a “financial benefit” brought back some memories.
Back when I was a lender with Colonial State Bank, I had a discussion with the Credit Manager about allowing both parents to be co-borrower with their son.” He goes, “What’s the financial benefits for the parents?” I went, tongue-in-cheek, “Well, for one thing, the son gets to leave the house.”
Cheers,
Angelina
Qlds007 wrote:Sorry i hate to disagree with Marjac but certainly the names on the Title and the loan can be totally different.As long as you can persuade your lender there is some Financial Benefit for your mother to be a co borrower or Guarantor there is NO need for her to be on the Title.
They may suggest or insist that she gets independant legal advice.
Cheers
Yours in Finance
Yes your right Richard, technically there is no need for all borrowers to be on the title, but persuading a lender that there is a benefit to the Guarantor maybe an issue. (I don't think a son/daughter moving out of home would be sufficient
)I think it would be just a lot easier to obtain finance, if the parents are needed to meet servicability, if borrowers are on the title
Most main stream lenders/Banks, I've worked for a few of them, have been bitten hard with having Guarantees 'put aside' (even when independant legal advise had been obtained) especially when it Guarantors are no longer working (retired etc)
Hi Marjac
Again hate to disagree.
This week alone we have done a top up for a forum member with his existing Big 4 Bank which was in joint names where the property is in 1 name only. The Bank originally declined the deal when the client went direct but then approached us and we ended up putting in a strong submission to credit which they approved.
Second deal of the week was with CBA in a similar position. Again approved.
Certainly i take it on board that using a Guarantee ot Co-borrower is harder than it used to be but having been in the game for
25 + years it is often just about presentation and a decent Credit submission showing legal justification.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Marjac,
Glad you picked up on the humor.
Angel
)
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