A commercial property has been inherited by four grandchildren. All want to maintain their share of ownership. The property is worth $1m and is leased, which is approx $50k pa.
One of the four wants to invest in property. When applying for finance, aside from their proportion of the lease payments as income. Do banks take into account the 1/4 share as assets for the purposes of getting additional finance? Or because of the shared ownership in this case, does this change the banks view.
Hi Woodsman,
The banks will view his/her share as an asset, however, it will be very difficult to include the property as security on future sole lending, as the property has Three other names on the Title, Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Hi Steve,
I’m also in a similar situation but with just the one partner. This person already has a loan, and after talking to a few mortgage brokers we have been informed that any borrowing secured against the joint owned propery, despite being taken out by me would require him to either be a guarantor or conversely joint lender if he so wished. The partner does not want to go ahead with this as it leaves him a little exposed and also restricts his borrowing capacity.
Is there anyway around this? There is a lot of equity in the property and no outstanding debt and i’m not too sure whats the best way to unlock that considering I have a partner reluctant to go ahead.
Hi Funk Me,
Most lenders will require a Third party guarantee, although certain lenders will assess it outside of their normal lending criteria,Is the property/title under your individual names or a Company or Trust? Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
It is in our individual names….
Cheers
If you are interested in this topic look out for a article that I wrote which will appear in the next issue of API (April). There are heaps of issues to consider.
Cheers
Stu
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