Is it possible to have both names on loan but just one person on title?

Hi everyone,

Most of the previous threads on this are quite old so I thought I'd get a refresher.

Due to our employment circumstances, our bank required my wife and I to apply for a loan in both of our names. We were hoping to offset the IP expenses and losses against my salary as much as possible. In previous threads, the advice seems to be that even with both names on the loan application, the property can still be registered in one person's name, and the name on the title is all that the ATO cares about (i.e. not whose names are on the loan).

I've mentioned that to our broker, but she insists that this is not possible in our case, and the best we can do is register as tenants in common with a 99%/1% split in my favour. Does this sound correct?

On a related note, does anyone have a good recommendation for an accountant in Melbourne that specialises in investment properties? Our normal guy only does tax returns and wasn't able to help with my questions on this.

Thanks in advance!
 
On a related note, does anyone have a good recommendation for an accountant in Melbourne that specialises in investment properties? Our normal guy only does tax returns and wasn't able to help with my questions on this.

Thanks in advance!

Google up "House Of Wealth".
Coastymike from this forum is one of the directors.
They are IP experts.;)
 
Thats incorrect. You can have one name on the title but both names on the loan. This is only possible in a spousal arrangement, i.e. can't do this with any other relationship like mum and daughter, brother and sister, etc.
 
Agree with Shahin - it's not an issue having both on the loan and one on title. The reason just needs to be explained to the lender. It's not an uncommon scenario.

Cheers

Jamie
 
I've mentioned that to our broker, but she insists that this is not possible in our case, and the best we can do is register as tenants in common with a 99%/1% split in my favour. Does this sound correct?

Incorrect as others have said. We've done hundreds of loans where both people are on the loan but only one on the title. You can't do this between two brothers and a parent and child, but you can do it between spouses (married or defacto).

For what it's worth, banks don't recognize 99/1% ownership as an 'equitable' interest. If you're trying to do this between two people not married, it won't work either. Your broker has been successful with this advice so far because of things she doesn't know. :rolleyes:
 
Spouses ----> One can be on title but both can be on loan. This policy is as old as lending itself.

well almost

CBA for lends >80 % only rolled over in the last couple of of years.

Id expect that there are still some lenders that will insist on direct commercial benefit ie, having a borrower on title even though they are spousal.

ta
rolf
 
Hi everyone,

Most of the previous threads on this are quite old so I thought I'd get a refresher.

Due to our employment circumstances, our bank required my wife and I to apply for a loan in both of our names. We were hoping to offset the IP expenses and losses against my salary as much as possible. In previous threads, the advice seems to be that even with both names on the loan application, the property can still be registered in one person's name, and the name on the title is all that the ATO cares about (i.e. not whose names are on the loan).

I've mentioned that to our broker, but she insists that this is not possible in our case, and the best we can do is register as tenants in common with a 99%/1% split in my favour. Does this sound correct?

On a related note, does anyone have a good recommendation for an accountant in Melbourne that specialises in investment properties? Our normal guy only does tax returns and wasn't able to help with my questions on this.

Thanks in advance!

Don't take tax or lega advice from a mortgage broker. This is completely wrong and would have far reching consequencces if you had listened to it.
 
Hi folks,

Thank you again for your advice, this forum is a lifesaver! I'm under a bit of time pressure because our conveyancer is working on our purchase documents over the next 2 days, so I really appreciate the quick replies.

I passed this feedback on to our broker, but she has responded by saying that the bank we intended to use for the loan (ME bank, we are looking to fix for 3 years at 4.69% for predictable repayments) has confirmed that they need my wife and I to be on BOTH the loan and the title. She also stated that only the Big 4 banks will allow one person to be on the title but have both of us as the borrowers.

She is now checking whether ING will allow this, although their rate is not as attractive as the ME Bank 3 year fixed loan.

So she is saying that since only the 4 major banks allow this, I have to decide between registering the title as tenants in common with a 99/1 split to get a better rate, or try to go for just my name on the title and go with one of the Big 4 but with a significantly higher interest rate.

Questions:
- Can anyone confirm whether they have seen either ME Bank or ING allow this scenario (i.e. both husband and wife on loan, but just husband on title)?
- If it is possible to get the ME Bank loan with us planning to put just my name on the title, what can I say to my broker to convince her that this is possible?
- At what stage would our broker have to tell ME Bank that only I would be going on the title? Do they ask that question? Just trying to figure out why they would not allow this or where it comes into the discussion/application?
- Can I just disregard what our broker is saying regarding the limitation here and instruct my conveyancer to put my name alone on the title? Or will this put my loan in jeopardy and needs to be sorted with my broker first? I'm reluctant to do this, just wondering what my fall back plan is if she just can't get the loan without both of us going on the title?
 
Straight from the ME Bank handbook - I have put many, many joint loans (with one on title) with them with no issue whatsoever.

5.1.4 Borrowers of Convenience
A borrower of convenience is defined as a borrower that is added to the loan application to provide serviceability and/or security but does not receive a tangible benefit from the loan transaction.
Borrowers must have a beneficial interest in the loan transaction either by way of joint ownership of the security and/or dependence on the mortgagor in a marital or de-facto relationship
 
Hi folks,

Thank you again for your advice, this forum is a lifesaver! I'm under a bit of time pressure because our conveyancer is working on our purchase documents over the next 2 days, so I really appreciate the quick replies.

I passed this feedback on to our broker, but she has responded by saying that the bank we intended to use for the loan (ME bank, we are looking to fix for 3 years at 4.69% for predictable repayments) has confirmed that they need my wife and I to be on BOTH the loan and the title. She also stated that only the Big 4 banks will allow one person to be on the title but have both of us as the borrowers.

She is now checking whether ING will allow this, although their rate is not as attractive as the ME Bank 3 year fixed loan.

So she is saying that since only the 4 major banks allow this, I have to decide between registering the title as tenants in common with a 99/1 split to get a better rate, or try to go for just my name on the title and go with one of the Big 4 but with a significantly higher interest rate.

Questions:
- Can anyone confirm whether they have seen either ME Bank or ING allow this scenario (i.e. both husband and wife on loan, but just husband on title)?
- If it is possible to get the ME Bank loan with us planning to put just my name on the title, what can I say to my broker to convince her that this is possible?
- At what stage would our broker have to tell ME Bank that only I would be going on the title? Do they ask that question? Just trying to figure out why they would not allow this or where it comes into the discussion/application?
- Can I just disregard what our broker is saying regarding the limitation here and instruct my conveyancer to put my name alone on the title? Or will this put my loan in jeopardy and needs to be sorted with my broker first? I'm reluctant to do this, just wondering what my fall back plan is if she just can't get the loan without both of us going on the title?

Friggen Hell!

Ditch the broker asap as they are dangerous and give Aaron a cal. He has given you a straight answer.
 
Aaron_C, thank you so much for digging out the specific section from their policies.

I have just passed that on to our broker, I'm not sure why the person she spoke to at ME Bank this morning would have said we can't do it, as that section of the handbook seems like it is saying that we should be fine!
 
Thanks folks, another call to ME Bank citing the section from the policy that Aaron supplied, and the issue appears to be sorted. Our broker now has concerns about whether the vendor will allow this arrangement, I'm hoping they don't care about where we get the money from and how the ownership is structured, why would they?!
 
Thanks folks, another call to ME Bank citing the section from the policy that Aaron supplied, and the issue appears to be sorted. Our broker now has concerns about whether the vendor will allow this arrangement, I'm hoping they don't care about where we get the money from and how the ownership is structured, why would they?!

I don't understand why the vendor would care?!?
 
Our broker now has concerns about whether the vendor will allow this arrangement, I'm hoping they don't care about where we get the money from and how the ownership is structured, why would they?!

Simple solution is to get a new broker - Aaron would be a logical choice given the valuable advice he's provided which has enabled this deal to be structured properly.

Cheers

Jamie
 
Shab,
The issue of third party is not a straight forward one. Most lenders will allow husband and wife on the mortgage loan with only one on title, but not always or all lenders. Some will restrict it to PPOR's for reasons that escape me (presumably beneficial interest is apparent on PPOR's but not on IP's - go figure!). Some will allow a 90/10% max split tenants in common but others will allow a 99/1% sometimes depending on the individual assessor at that lender.

Another option is to see if you can service with another lender in your own right.

I agree with Terry, please consider changing brokers and get yourself an accountant who is on top of tax law for investment properties.

As to the contract of sale, if you signed 'and/or nominee' you should be fine, just needing a nomination form signed prior to loan documents being issued. If both names are on the COS without that nomination clause, I believe you will need vendor approval and as others have said, there should be no reason not to obtain this unless the vendor is looking for a loophole to invalidate the contract. A solicitor will be better able to advise on this.

Good luck with it.
 
As to the contract of sale, if you signed 'and/or nominee' you should be fine, just needing a nomination form signed prior to loan documents being issued

With Gregbeing a mexican, and/or nominee is every day stuff.

A caveat here for others reading this thread NOT from VIC, QLD or SA, please double check with your conveyancer, settlement agent or solicitor so u dont end up with possible stamps consequences

ta
rolf
 
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