Lending Problems

From: Brian Rich

Can anyone out there tell me if this is normal? I have a loan with a credit union and every time I take out a new loan to buy or refinance an IP they tell me my partner needs to see a solicitor to be read the contract and make sure she understands it. They say it has to be done each time as it is a new contract and she owns half our house (we are defacto) and the loan & house is only in my name. We have to use the equity in our house, as the IP we currently own has not increased sufficiently in value. We have just re-financed for 5 years but want to buy more and are wondering if it might be more beneficial in the long run to change banks, or are all banks the same?

Has anyone else had this problem and if so is there anyway out?


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Reply: 1
From: Duncan M

We started out with a Credit Union and ran into a similar problem, they just
arent set up for Investors. They're really only comfortable lending to Mum's
and Dad's buying their home.. I'd definitely be moving on.


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Reply: 2
From: H T


I believe thats normal because your defacto is in fact going guarantor for your loan so she needs to (under the law) be aware of the contents of the new contract.

This banks have been burnt heavily by people who claim they weren't aware of the contents of the contract. This is their way of ensuring that the contents of the contraact are fully understood by those signing it

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Reply: 2.1
From: Alan Hill

Yes, that is my experience too.

If your partner is effectively going 'guarantor' than the whole 'independent legal advice' process seems to be adopted.

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Reply: 3
From: Rolf Latham

Hi Brian

It is for prevention of STDs

Sexually Transmitted Debt.

It is crucial that the guarantor actually knows the impication of the guarantee, this is as much protection for the lender as the guarantor.

Gets even sillier where you are guaranteeing loans to your own company or trust, but again indepenedent legal advice is neccesary.


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Reply: 3.1
From: Sim' Hampel

Ooh... horrid memories of buying 2 properties at once through a company/trust structure, with both my wife and I as personal guarantors.

I forget how many times I had to sign my name that afternoon... the pile of papers was literally 4 inches high !

Took out a small rain-forest in the process too.

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Reply: 3.1.1
From: Brian Rich

Thanks for all the replies. It looks like I am stuck with it for now. Will have to consider trying other lenders next time.
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From: Ric1 .


Why don't you put the IP in both your names? That would get around the problem. Even 99%/1% would do the trick, if it becomes a tax issue.

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