% Ownership

Hiya

In the process of financing 2nd Ip. Due to tax reasons, trying to put 99%

in hubby's name and 1% in my name.

Mortgage broker first says Office of State Revenue (the one that collects stamp duty i guess??) does not allow that; checked with conveyancer who says this is not true. Then broker backtracks and says Commonwealth bank (which is where i am getting the loan) will not approve; says minimum 90%, 10% ownership.


Is that true? I smell a rat here, but why would he lie?


Cheers
 
It shouldn't make any difference to him.

He probably just doesn't know. I wouldn't take accounting advice from a mortgage broker, unless he was also an accountant.
 
Office of state revenue don't care.

Some banks (and sometimes the LMI'ers) do care and want a min of 90:10 split - although why is beyond me when you are talking about a married couple, because both parties have an equitable claim on the property regardless of legal title.

Myself and DH have gone for a 90:10 split for our (impending) IP just to cover our bases.
 
I wouldn't take accounting advice from a mortgage broker, unless he was also an accountant.
Agreed. It may be a requirement of the Mortgage Insurer. I doubt the bank is interested. OSR certainly does not care.
I have a 99%/1% split title with Macquarie as mortgagee.
 
The reason why you'd do a 90:10 split with the higher income earner owning 90% of the property is due to maximising the amount of negative gearing, right?

So what happens when the property becomes CF+ and the higher income earner then has to pay more tax on the property (due to possibly being in a higher tax bracket)?
 
Hiya

Yes, you are right; we are going to pay LMI for a 90% loan; if the OSR and the bank do not care; maybe it is the mortgage insurer that cares?

Anyone with prior experience care to comment?

thanks
 
If it is just for negative gearing tax benefits, have you considered having the property on your hubby's name alone and if required mortgage on joint names to have more borrowing power. I have done that on a property. The property title is only on my name and the loan and mortgage is taken on joint names with my partner. :)
 
Hiya

In the process of financing 2nd Ip. Due to tax reasons, trying to put 99%

in hubby's name and 1% in my name.

Mortgage broker first says Office of State Revenue (the one that collects stamp duty i guess??) does not allow that; checked with conveyancer who says this is not true. Then broker backtracks and says Commonwealth bank (which is where i am getting the loan) will not approve; says minimum 90%, 10% ownership.


Is that true? I smell a rat here, but why would he lie?


Cheers


Total crap in my experience.

I am sitting in our house. We settled on it in November last year.

We financed through the CBA.

My wife owns 99% of the property and I own 1%.

The bank wouldn't have cared if she owned 100%, or if it was an investment property.

My wife has no income and no savings history and no credit history, being new to Australia (not even a permanent resident -yet). My income counted and that was it.

She is named on the loan document and mortgage document along with me.

I did it all over the phone and fax with CBA and never met a person.

Your broker may know better ... but I have done it, no problems.

cheers

RightValue.
 
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If it is just for negative gearing tax benefits, have you considered having the property on your hubby's name alone and if required mortgage on joint names to have more borrowing power. I have done that on a property. The property title is only on my name and the loan and mortgage is taken on joint names with my partner. :)

Agreed. Why bother to apportion 1%? Just put the title in 1 name.
 
Virgo,
I recently got a pre-approval through CBA for a 95% loan and it was a condition of the LMI insurer that we did a 90:10 split. When we were first told this I asked MB to go back and confirm which she did, seems they want both of us to have a stake in the property as my wife's income is part of the servicability calculation. Only way not to do it was to reduce to a 80% loan - at least with CBA as have not tried any other bank. 90:10 split was not an issue for us so am now looking for a property to use the loan.

Mike
 
Hiya

It varies on the day of the week. CBA, typically like many lenders, run hot and cold with such things. Its ok on Tuesday and Fridays, but not other days of the week.


ta
rolf
 
What's going on with the MIs though? As if a spouse must have a small % of the title to have a stake in the property. Have they not heard of the Family Law Act?
 
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