Refinance with JV property

Hi, any help appreciated.

Scenario is:

House currently owned by myself and my wife 50% and my parents 50%.

My parents don't have enough serviceability to borrow more if we refinanced the house.

However we would have enough serviceability to borrow more even if we only counted half of the rental income on the property and if we had to cover the full loan amount.

So lets just assume we have bucket loads of serviceability on our side, but my parents don't have enough.

If we can cover the serviceability required ourselves, will the bank lend us more? Or will they hold back because my parents are 50% owners and can't service the extra borrowed?

Current valuation $400 000. Borrowing $320 000 through NAB. Borrowing 50/50.

Future potential valuation $700 000.

How much of that could we access in a 80% lend refinance given this scenario?

Thanks

Tim
 
Hi, any help appreciated.

Scenario is:

House currently owned by myself and my wife 50% and my parents 50%.

My parents don't have enough serviceability to borrow more if we refinanced the house.

However we would have enough serviceability to borrow more even if we only counted half of the rental income on the property and if we had to cover the full loan amount.

So lets just assume we have bucket loads of serviceability on our side, but my parents don't have enough.

If we can cover the serviceability required ourselves, will the bank lend us more? Or will they hold back because my parents are 50% owners and can't service the extra borrowed?

Current valuation $400 000. Borrowing $320 000 through NAB. Borrowing 50/50.

Future potential valuation $700 000.

How much of that could we access in a 80% lend refinance given this scenario?

Thanks

Tim

I am doing one of these sorts of loans now.

Yes the bank will look at the overall serviceability - all incomes and all debts of all 4.
 
Pretty standard, so long as all applicants combined can service the increased debt. Each applicant isn't required to service the debt solely, but as always be aware that you're liable for this debt increase too.
 
Can access 80% of $700,000, i.e. $560,000 comfortably without paying any LMI. This will give you $240,000 in equity to use. This also assumes that you all combined can service this debt.

Note you'll generally have to include the full loan amount in future loan applications. That is, if you purchase an additional IP, you'll need to include the full $560k worth of debt liability into your application - not $280k.

Cheers,
Redom
 
Hi Tim

All 4 applicants income considered on the plus side of the ledger and all expenses on the other side. 2 sets of Living Allowances would be factored in.

If you were to buy again in the name of you and your wife only then whilst most lenders would consider 100% of the loan liability on the existing loan there are a few that would only consider 50%.

Such lenders would obviously aid your serviceability go forward.

Equity release to 80% of current lender valuation less current loan liability.

Cheers
 
Great thanks for the replies everyone.

Seems like it's possible as long as I can pick up the slack with extra servicability on our end.
 
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