Help on Part ownership

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From: Grant A-Y


Is it possible for me as a part owner of a property (1 third share inherited) to take a mortgage out in my name only, without involving the other two owners? They are agreeable to my taking out a loan on my part of the equity, they just do not want to be involved themselves at this stage.

All suggestions welcomed.

Grant
 
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Reply: 1
From: Paul Zagoridis


I've never tried it. I'm answering because I don't want you to think we don't care.

My guess is you'll need a non-conforming loan. For this to work you must own the property as Tenants-in-Common (not as joint tenants). Problem's arise if you default. Financiers love joint and several liability.

If you own it as joint tenants then your partners will need to approve the transaction and agree to become liable under your loan contract.

Good luck. Keep in touch as I'm sure there are other approaches if a traditional financier can't make it fly (e.g. solicitors funds).

Dreamspinner
 
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Reply: 2
From: Simon H


in nsw as far as the certificate of title is concerned, if you hold as tenants in common in equal shares,ie x,y,z as tenants in common in equal shares then the mortgage would be recorded as mortgage in regards of x only (whoever's name is on the mortgage document as mortgager).
hope this helps
simon h
 
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Reply: 3
From: Ian Findlay


Hi Grant.

No, you cannot take out a mortgage on your share of the property without
involving the other co-owners since they are "interested parties". The bank
wouldn't have the option to repossess if you defaulted.

However you could remortgage, buy out the other owners two-thirds and
increase the equity to say 80% from 67% you would have in the property. Say
the property is worth $200,000, you own $66,600.
and the other parties $134,000. You could get a loan for $160,000, use
$134,000 to pay out and be left with $26,000 cash in hand.

You might need to watch out for stamp duty on the whole $200,000 though.

Hope this makes sense.

Ian



From: "Grant Young" <[email protected]>

Is it possible for me as a part owner of a property (1 third share
inherited) to take a mortgage out in my name only, without involving the
other two owners? They are agreeable to my taking out a loan on my part of
the equity, they just do not want to be involved themselves at this stage.

All suggestions welcomed.

Grant



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Reply: 4
From: Delia L


I have my property 50% tenants-in-common and when I went for a loan (3 years ago) I was given 2 choices;
1. taking out joint mortgage
2. having the other party go guarantor of my loan in case I default then they can repossess.
But that's a few years ago when competition was not as strong as now. There may be some financiers would have a clever way to get around that now?? I'd love to know the way if other parties doesn't have to get involve!
Good luck!
cheers

Delia
 
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Reply: 5
From: Rolf Latham


Hi Grant

Only with expressly written permission from the others on title. Even then a lot of lenders will not want to know - this makes the property an ill liquid asset in the case of a default.

Ta

Rolf
 
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