Sorry if this topic has already been done, couldn’t find it in a search of the site.
Basically my friend & I started to purchase property last year, and are at the stage where we want to commence again in 2005. When approaching the Aust Central Credit Union for a joint loan based on both of us working (about $140,000 combined incomes), owning individual and joint properties, we got the following response.
“In relation to joint loans with business partners, you both must be able to afford the debt in your own rights , so we assess the loan on your ability to repay whole loan (not just half ).”
As you can imagine, this has severely cut our borrowing capacity (to around $210,000) because it works on individual repays, not joint capacity. I can’t understand this at all, doesn’t make sense, and am trying to think laterally here through finding an answer on this forum.
If anyone has had this “challenge” before, or has any ideas how to get full finance (not this 1/2 concept), it would be greatly appreciated. We are looking at around 400-500k.
Many thanks
MichaelMichael Maddy
[email protected]
Canberra, AusI have just finished an article on this for API. I have sent you an email.
Cheers
Stu
That’s why it is not a good idea (from a financing perspective) to get loans in joint names. It adds to your risk (by exposing both of you instead of one) and severly hinders your borrowing capacity.
Not only are you repsonisble for the whole debt, not just your share, but when going for subsequent loans, only half the rent will be attributed to you application. ie half the rental income, but fill debt will be included in your assets and liablities.
One solution is not not tell them. Just state your share. Usually they will not ask, and not pick it up. You would not be lying either.
Another solution is to buy properties in alternate names – maybe using trusts.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
