Hi all
My wife and I currently have a mortgage on our property, and unfortunately we are soon to be seperated.
What are our options to keep the house (beyond obviously maintaining the mortgage), but more as an investment in my name..we would like to keep it, selling it is a last resort, as it took so long to get into the market, and at this stage selling would mean that we would most likely not make anything on the property (as we borrowed almost 1/3 from family on the side, which is to be paid back soon..
Can we refinance and split the loan into 2 parties?
Many thanks
timTim , You can restructure the loans and split the current loan amount into two separate loans but the borrowers on each loan would have to be in the same names. YOu cant have a loan in your name and a loan in your wifes name as the property is in joint names im assuming.
You just take control of payments on your half and likewise for your wife. Although the bank will still hold you jointly responsible for both loans.Rod
Timboo,
I think there are two separate issues here:
1) the mortgage
2) onwership of the propertyIn terms of the mortgage, the Bank doesn’t care whose name is on the mortgage docs, as long as you make the repayents. As I understand it, the bank will only give 1 mortgage over the property. They will leave it to you and your wife to sort out who owns what percentage of the property and who makes what percentage of the repayments.
I don’t know the process or costs involved in getting your wife’s name added to the mortgage docs. But if your wife’s name is not added, my understanding is that, in the Bank’s eyes, you would be solely responsible for repaying the mortgage. If her name is added, you would both be responsible for the mortgage. So I think the bigger issue is around the ownership of the property.
So, if you are both agreed that you want to keep the property, you could make and agreement between yourselves outlining that you will both make 50% of the repayments and will both receive 50% of rental income (if you leave it in your name, your wife can still live there and rent it off you – eg, rent is $250/week. you each get $125 rent, so your wife would just pay you $125 per week). this makes repayemtns tax deductible but you may incur higher CGT down the track based on the proportion of time the property was an investment property).
you also need to outline that you would each pay 50% of maintenance costs or any other renovations you may wish to do in the future. you may also need to adjust you wills to ensure your wills reflect what you want to happen to your 50% of the property in the event of your death (especially if either of you want to re-marry).
I have recently entered into an arrangement like this with business partners. So, if you like, send me a PM and I’ll ask my business partner if it’s ok to email you a de-identified copy of the documents we drew up and the Excel spreadsheet we use to keep track of the finances (they are very basic but do the job for us). You could show these to your legal reps & see if you think it is workable for your situation.
Cheers
Jason.You should talk to a solicitor about this. It may be better to leave things as they are, or for you to buy her share. There are special stamp duty exemptions for transfer of title to spouses due to divorce and separations.
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
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