All Topics / Finance / Is it possible to have one name on the title and a different on the mortgage?

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  • Profile photo of mrssmithmrssmith
    Member
    @mrssmith
    Join Date: 2007
    Post Count: 8

    11/7/07  Hi there, I am currently having challenges with financing a new home we are constructing to then sell. The problem is we want to purchase the property in our company name for which we have 2 directors whose salary is not sufficient to satisfy the bank on servicing of the debt, therefore want to bring in a guarantor. The bank will not allow a guarantor whom has no vested interest in the property therefore the property title would have to be purchased in the company name plus the guarantor's name (which we dont want).

    Our accountant has told us we should be able to have the mortgage in our own names and the title in the company's however the bank is saying NO, which I can understand.

    Does anyone know if this is possible or not? Or have any suggestions as to options?

    Thanks

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    I would let your Accountant organise the finance as i am with your Bank.

    They would stand no hope in repossessing the property in the event of you defaulting on the repayments as the Court would argue that their was no beneficial interest in the Guarantor in proving his Guarantee and it could not therefore be relied upon.

    Third party loans are relatively common but there needs to be some beneficial interest. (Husband and Spouse etc)

    Often Accountants and Solicitors make these suggestions without the real knowledge of how financing really works.

    Richard Taylor | Australia's leading private lender

    Profile photo of NucopiaNucopia
    Member
    @nucopia
    Join Date: 2007
    Post Count: 102

    I have a family trust and ABN and buy all my investments in the company name.
    When I first  aproached the bank about investing 5 years ago, I had Zero assets and a non taxable pension as income. However  the bank had no problems with the loan being in my name as sole borrower with  the trust/company as the title holder of both properties ( company name on Titles) and as a  garantor  along with my mum who put up her house as collatarol  and garantor for the loan.
     bottom line if you dont have enough income to service the loan and no assets to put up as colatarol the bank is not going to be confident in giving you funds regardless of whos names on the title/loan.
    Find more income and maybe find an asset the bank can hold as well. and look for a bank and loans officer who can understand and be creative with your situation.
    good luck in  finding  the solutions Im sure if you want this bad enough you will find a way.

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