Structure + Finance change and implications

[EN710]

I have just got my Permanent Resident visa and currently in the process of purchasing 1st IP (under my name and partner's name). Would like to know your opinion on some changes on the purchase...

Contract hasn't been exchanged, I just need to resign in. The variable here is now the loan as currently it has been approved, and we are just waiting for formal approval. The vendors’ solicitors are looking to exchange Contract when they return from their break on 7th of Jan. I am looking to settle before the 18th of Jan.

My question: Any potential issues that I need to be aware of with the above changes (e.g. tax?)?

Current:

1. Contract under my name and partner's (my partner is a citizen, and I was with my temporary visa)
2. Loan (CBA) under my name and partner's

Change to:

1. Contract under my name
2. Loan under both names (per current approval)

My thought for the change is that we will have two thresholds for land tax in the future as I am likely to purchase more (i.e. buy under my name first and then his). Though the finance structure might not be ideal for his borrowing in the future.

This is for the property in this post: http://somersoft.com/forums/showthread.php?p=981578#post981578 (thank you all for the responses)
$190K mark and should be neutrally geared from the time we purchase.

 

[Marty McDonald]

You will need to let the bank know and will likely need to be re-approved. Note not all lenders are ok with one on title and joint borrowers however CBA is fine with it. If you dOnt get it reapproved the mortgage documents will be incorrect.

 

[Aaron_C]

As marty said changing simple things like names on titles will have to be reapproved by the credit officer. Just a formality but it adds time to the process.

 

[EN710]

Thank you, just contacted my broker and solicitor. Broker will contact CBA on Monday and we will go from there depending on what they say. Fingers crossed.

You will need to let the bank know and will likely need to be re-approved. Note not all lenders are ok with one on title and joint borrowers however CBA is fine with it. If you dOnt get it reapproved the mortgage documents will be incorrect.

You mean CBA ok with two names, but the morgage document still need to be reapproved ? If that the case, would it be the same if I request the loan just under my name (I have adequate income, clean credit and good amount of savings)?

As marty said changing simple things like names on titles will have to be reapproved by the credit officer. Just a formality but it adds time to the process.

From your experience, how long does this usually take?

 

[Aaron_C]

From your experience, how long does this usually take?

At this time? Maybe a week
Normally 1-2 days with CBA.

 

[Marty McDonald]

Either way is fine but you just need to choose the structure you want and let your broker know so he can resubmit (will be another credit file hit by the way).

You could always leave as is too and make your partner a 10 or 20% owner. Often it's simpler to keep all as joint if you plan to buy more properties and you need the partners income in the future.

 

[EN710]

Either way is fine but you just need to choose the structure you want and let your broker know so he can resubmit (will be another credit file hit by the way).

You could always leave as is too and make your partner a 10 or 20% owner. Often it's simpler to keep all as joint if you plan to buy more properties and you need the partners income in the future.

Will leave it as is if there're no enough time. Otherwise his name will be included to the loan after our OTP PPOR settle in 2014

I prefer have one name for the first couple IPs, so if dirt ever hits the fan (hopefully never), bank will only chase one rear instead of two

 

[Terry_w]

Any stamp duty issues on the change

 

[EN710]

Any stamp duty issues on the change

Hopefully not, since contract hasn't been sent to vendor's solicitor, means title hasn't changed legally. If anything, it will be my poor conveyancer and broker who need to work when their office suppose to be close ...

I'm not sure if there are any cost from bank on mortgage name change tho.

 

[Terry_w]

Hopefully not, since contract hasn't been sent to vendor's solicitor, means title hasn't changed legally. If anything, it will be my poor conveyancer and broker who need to work when their office suppose to be close ...

I'm not sure if there are any cost from bank on mortgage name change tho.

its not that simple im afraid. title doesnt change until after settlemenr, but a change in names on contract would be a dutiable transaction. there may be a way to keep the contract as is and have different names on the transfer without incurring extra stamp duty. your solicitor should be able to help. it is a lot more complicated than u may think.

 

[EN710]

its not that simple im afraid. title doesnt change until after settlemenr, but a change in names on contract would be a dutiable transaction. there may be a way to keep the contract as is and have different names on the transfer without incurring extra stamp duty. your solicitor should be able to help. it is a lot more complicated than u may think.

Eeep thank you for the warning Terry. Either way, broker said the entire loan application need to be redone if name need to be changed, so I will l keep everything as is since there're not enough time. Even at this rate, the settlement will be on Feb while my preference is in Jan, oh well, holiday season it is

Merry Christmas all!