Hi, was hoping one of you could help.
My defacto partner and I wish to purchase our first home together. Becasue he is currently employed on a casual basis (full time hours) and has not been employed there for more than 12 months, his income is not being recognised as acceptable to lenders. To get the best deal we can we have decided to put me down as sole borrower, despite the fact he will be contributing to the household. My job is well paid enough to be attractive to the lender and I will have no problem making the repayments all by myself if he loses his job. If I include him however on the loan docs, I would fail the affordability test as he becomes an expense of mine because they don't regard his income.I am of the belief that he would also not be able to be on the certificate of title, ie that would be unacceptable to the lender as if i defaulted on the repayments, the lender would be faced with another person who has half interest in the property. I think that the mortgage is given by the property owner (on the title) as security for the home loan so how can a person who is not on the loan docs do this? Is this true, or can anyone go on a certificate of title? My partner is uncomfortable about not being on the title and I am not sure if he can or cannot.
Sonia from Elwood
Joint ownership (on title) and loan in a single name should not be an issue with the lender. Both parties will however need to sign the consent to mortage (which is registered on the title).
Sonia
Depending on numerous other conditions the fact that he has not been casually employed for 12 months will not necessarily deter a lender from approving a loan.
Without the full details it is difficult to provide you with an actual answer but certainly worth further investigation.
Richard Taylor | Australia's leading private lender
Further info if this helps:
We are trying to go through a particular lender who is the lender of parents as we are trying to avoid mortgage insurance via a family pledge. My partner has only been working at his current employer for 2 months and although they have an extreme amount of work to do they will not create a permanent position in this economic climate. Prior to that he was studying. We have only $25K saved which on a $600K property, with the FHOG, we will cover stamp duty and costs (Victoria). His net fortnightly income is $2000, mine is $2800. I have been offered a n interest rate of 5.2% with no mortgage insurance due to family pledge. Would there be a way of including him in this equation with these benefits?Ok slightly different situation.
I do not like the Family Pledge product as it has numorous issues for both parties.
You would be better off for your parents to take out a individual loan for 20% of the purchase price and then gift this to you and you arrange a stand alone deal for 80%.
That way they can still utilise the balance of the equity in their property and are not limited to being able to only sell or refinance if your property can support the increased borrowing.
Would be no LMI and casual employment would not be an issue.
5.2% is standard rate so they are not do anything special for you.
Richard Taylor | Australia's leading private lender
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