Loan set up query

[newtoinv]

i wasnt aware that you can be a party on the loan if you're not listed on the title. how does that work? - I was told by my lender this wasn't possible as the co-borrower has no direct benefit to the loan.

So if I wanted to purchase a house in my name - I could use somebody else's income aswell as my own to service the loan?

Could someone explain this?

 

[caporale]

Hi newtoinv,

Some lenders (and most that I use for my clients) will allow a married partner's income to service the loan with the spouse without being on the title. This is because they have a vested interest in the property by the virtue of marriage.

Lender will require the other party to be a co-applicant or a guarantor on the loan.

 

[newtoinv]

thanks for the reply.

What if it is a defacto relationship/friend - can they still be on the loan

 

[Rolf Latham]

Hiya

Defacto is regarded as married at common law for the purposes of asset seperation, so lenders tend to have to reflect that and allow defacto and same sex couples to borrow on the same basis as married couples.

ta
rolf

 

[Minxdamanx]

Hiya

Defacto is regarded as married at common law for the purposes of asset seperation, so lenders tend to have to reflect that and allow defacto and same sex couples to borrow on the same basis as married couples.

ta
rolf

Just to clarify Rolf - same sex couples can borrow on the same basis as married couples? My daughter and her partner were told differently recently. (WA if that makes any difference)

 

[Rolf Latham]

Hiya Minx

We have never had an issue with this one with any lender.

You get the occasional one that might try it on where you have a credit manager being a smarty. Might not even be a legal precedent there, but no lender wanst to be seen as being discriminatory on the basis of race, sex, religion or relationship orientation, its just not PC

ta
rolf

 

[Minxdamanx]

Hiya Minx

discriminatory on the basis of race, sex, religion or relationship orientation, its just not PC

ta
rolf

Ta Rolf. That is very interesting and your advice much appreciated. Unfortunately doesn't apply to everything, but this is good news.

Sorry all - didn't mean to hijack this thread.

 

[Kristine..]

i wasnt aware that you can be a party on the loan if you're not listed on the title. how does that work? - I was told by my lender this wasn't possible as the co-borrower has no direct benefit to the loan.

So if I wanted to purchase a house in my name - I could use somebody else's income aswell as my own to service the loan?

Could someone explain this?

Hi newtoinv

The co-borrower or guarantor can provide a Servicing Guarantee

They have to show a benefit for risk, and immediate family members can usually show this

Few lenders offer this arrangement, but of those that do provided that the deal fits within lending policy there is not a problem


However, and this is a big however, the co-borrower / guarantor is then deemed to have accepted responsibility for the loan. Any future borrowings of theirs will be reliant on their capacity to service their own loan plus the loan they have assisted you with.

There are also Family Guarantees which are Security Guarantees, but if your issue is serviceability then the Serviceability Guarantee may be appropriate for you

Hope this helps


Minxdamanx: It would be a very old fashioned lender which would even raise an eyebrow - brothers and sisters, as well as 'same sex partners' buy property every day and serviceability is calculated on the 'our milk and bread' threshold ie a household, not a house with multiple individuals living in it.


Cheers
Kristine

 

[letiha]

I'm a co-borrower on one of the properties my mum owns, as was she on the place i recently sold. They are/were cross colateralised with 2 jointly owned properties. We recently looked at buying a property in my brothers name the NAb had no problems with us potentially being on the loan.