Hi Forum members,
I currently service a PPOR loan with my husband. The loan is in both our names and the security is in both our names.
My question is that can we refinance our loan such that I am the only borrower in the loan contract, even though my husband is still listed as joint owner on the security of the property? (We've paid the loan principal down enough for me to be eligible to service the loan based only on my income and not need my husand's income to help service the loan).
Will the lender have any issue with loan being under only my name?
I look forward to people's opinion/knowledge on this!
Hi Joyce,
I am pretty sure your lender will have an issue with it – if your name is on the title it must be on the loan. However, you can be on the loan without being on the title, just not the other way around.
The only other way would be for your husband to "gift" his share of the property to you, eliminating the need to pay any stamp duty. Then you can refinance. You'd have to do the whole thing all at the same time.
Cheers.
Thanks for your advice Hany.
That's a real shame. I didn't want my husband on our refinance application because he is not PAYG worker. He is considered self-employed and therefore requires tax returns which we haven't finalised yet. We wanna take advantage of the 1.5% special from St George and could have refinanced if I'm the sole borrower on this loan.
I just can't figure in my head why "if your name is on the title it must be on the loan"………does it really matter to the bank that all owners of the title have to service the loan when one the borrowers have enough capacity to service the loan by themselves?
It sounds such a pain in the b*m since we have high enough income to borrow 3 times as much we require for the PPOR loan!
We do a fair amount with the Dragon so might be able to come up with an alternative.
Shoot as email and I can let you now if we can help.
Richard Taylor | Australia's leading private lender
Joyce,
Now that I have a clearer understanding of your situation, if you are able to demonstrate that you can service the loan all on your own, and you husband is without tax returns, all you would need would be a letter from his accountant saying he does not have any further business debts etc. It's really a question of understanding the lender's policies in this regard.
What area are you based in?
Best regards,
Hany
Joyce,
Now that I have a clearer understanding of your situation, if you are able to demonstrate that you can service the loan all on your own, and you husband is without tax returns, all you would need would be a letter from his accountant saying he does not have any further business debts etc. It's really a question of understanding the lender's policies in this regard.
What area are you based in?
Best regards,
Hany
CentralChoice wrote:Hi Joyce,I am pretty sure your lender will have an issue with it – if your name is on the title it must be on the loan. However, you can be on the loan without being on the title, just not the other way around.
The only other way would be for your husband to "gift" his share of the property to you, eliminating the need to pay any stamp duty. Then you can refinance. You'd have to do the whole thing all at the same time.
Cheers.
Unfortunately, Henry is not correct in this instance.
The opposite of what he said is correct.
If you are on the loan, you must be on the title.
You can be on the title but not the loan.The reason is that if you are signing up for the obligation to repay the debt, you MUST have an obvious interest in the transaction ie interest in the property. Otherwise, it would be considered a third party guarantee (either for security or for income purposes)
Also, you application does not change with or without your husband. If he is not on the application, you still have to disclose he is living there, and he will become a dependant. If he is on the application, you just do not supply financials, and none of his income is taken into account.
Everything stays the same whichever way you approach it.KISS principle applies here. Just put everyone on the application and go for it.
Best of luck
The original answer still remains that both names still need to be on the loan…
All Title owner must be attached to any Mortgage on that property in some way, so whilst one person can technically be on the loan, the other will still need to be a guarantor. So Mrs can be the borrower & Mr be the Guarantor.
This is to avoid one party taking out a Mortgage Loan over a property without the consent of the other owner/s.
The Bank would usually want a good reason to do it & it is usually done when purchasing Investment properties, for tax reasons. Servicing will be calculated using borrowers income only & guarantor is also expected to have clean CRAA report.
Bottom line that I think Joyce wants the answer to – you WILL be able to refinance through St George for the 1.5% discount!!!
The dragon offers 5.19% fixed for 3 years… very temptating !!!
Rumour has it though that RBA are gonna cut rates again in March… don't base your decisions on what I hear on the rumour mill though!
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