Hi
My wife and I are currently refinancing and a snag has come up that the broker never told us about. let me explain.
Since one of the investment properties is in my name only(tax reasons), apparently the banks now require my wife to be a Guarantor to the loan on this property. This means she has to seek independant legal advice to explain what this means(although it is already plain as day to us) Now not that this is a big issue in itself but the cost of the solicitor is the problem. Three quotes so far(Brisbane area)of $600+ has blown me away!! All that for a solicitor to spend half an hour explaining the legal requirements and then signing the bank document to say my wife understands the legal requirements should anything happen to me.
Has anyone else gone through this? Although the new deal we are getting is worth it in the long run. If i new this I proably stuck with the bank i am with now as it is not that bad. Luckily my parents solicitor is going to do it for a fraction of the cost.
Do any of the brokers in this forum have an opinion on this?
Obviously the solicitors are covering their backsides so there is no future comebacks from the bank or person saying it was not explained properly.
Any comments would be appreciated!!I would get another broker, one who knows what they’re doing. G7
I can’t see why your wife would be required to guarrantee the loans – unless your income was not enough to service.
I think a solicitor shouldn’t charge more than about $200 per this advice. But some of them take it very seriously and do give you thorough advice, and charge for it.
It is unfortuate, but nearly all lendes require guarrantors to get independent legal advice. Most know what they are doing but some don’t.
eg A story forma few years ago. A guy got his old mum to guarrantee a loan. He went bust, the bank tried to forclose on mum’s property and she did not know what was happening. In the end she took them to court and won the case as she didn’t understand what she had gotten into.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
My sister and her husband just went thru this as well. One solicitor in 6 said yes and they wanted the loan asap so they got it done.
This was in Port Macquarie nsw. They were each buying an IP in individual names with a third putting up the deposits in joint names.
This solicitor did it for free and was very helpful. I’m glad they were sorted out but it did seem a bit weird to me. They were using a small financier through a broker.
I only use lowdoc loans and have never come across this. But it is out there.
Just another little hurdle when you are under pressure already I reckon.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Had the same problem personally.
Its not the brokers fault….its the banks requirement.Because I am the main breadwinner, but wanted to include the spouse on a property purchase, they were happy to extend the loan to me but the spouse to be party to the property transaction, had to do the guarantor thing ( in case I default, die, etc)
Same thing, had to get a financial planner as well as well as solicitor to explain to her what she was getting involved with.
$330 each !!! what a scam..It was for a subdivide and construct…so they repeated the process when we started the construct phase,( seperate loan) requested proof that she visited the two again and get advise.
Instead, we submitted a stat dec. along with a photocopy of the previous letters from the two experts, saying that she knew what she was entering into as per the previous advise.
The bank accepted this.
KP
Wilko, I had the same problem.
I had to go gaurantor for my wife, and my wife for me, that’s two solicitors in seperate deals.
PM me and I will give you the names of Solicitors I used – they both charged $50 for the 20 minutes or 30 minutes they spent with us.
It’s a safety thing for the banks because in one instance an unscrupulous person got their non-english speaking parents to go gaurantor and then went bust. The parents didn’t know what they were signing, and there was lawsuits and such.. the banks had some liability here to ensure that the gaurantor knows what they are doing.
Cheers
alwayscuriousOops sorry Terry – you told the same story I did, except shorter and more to the point. Sorry.
ANZ are doing it with all guarantor loans and this is policy where either the purchase was initially completed in two names for servicing and refinanced to one name for tax reasons.. Shop around or get a new deal with another bank is what I say…
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