Who Needs to be on Title Deeds

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WinWin
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@ozkeys
Join Date: 2014
Post Count: 5
November 24, 2014 - 2:32 am
I am used to English law on this matter and although English law is the basis for Australian law I need clarification on the following if anyone can help please?
Today “Terryw” made an interesting point on the forum that caught my attention “….you can own the PPOR in one name but have both of you are borrowers.”
This raises the question about who needs to be on the title of a property. I thought that someone who put their name to a mortgage would need to be on the title deeds, that is, owner/part owner but if Terryw is correct then that is not the case. Or am I missing something?
- This topic was modified 10 years ago by WinWin.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
November 24, 2014 - 9:05 am
All title holders must be borrowers or guarantors of the loan.
But additional non owners could also be on the loan. However in Australia the general practice of the major banks is to allow non owner spouses on the loan in addition to the owner spouse. They wont allow this for non spouses = spouse includes defacto.
The ATO allows all the deductions to fall into the hands of the owner of the property so adding a spouse on the loan will not effect deductibility – generally.
But this should not be done unless the owner spouse cannot qualify for the loan. 2 main reasons:
1. Doubles risk
2. Hurts future serviceability.
I have seen 1 owner but 2 on the loan countless times where the 1 owner can qualify on their own. I have unravelled many of these to improve both asset protection and serviceability.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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PHP
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@php
Join Date: 2014
Post Count: 111
November 24, 2014 - 9:25 am
Wiwin – if im not mistaken, what you have said is what I also believe is right. whoever is on the title, whether it be an individual, a jv, a company or trust, should be the same on the mortgage.
I think what Terry is pertaining to are mortgage applications for a married couple. Whereas the husband or the wife can be on the title alone, and he will apply for the mortgage but you can use the spouse as a support in the loan application.
So the main loan applicant for this example is the husband but the lender will also consider the spouse income as a supporting income and this can increase borrowing cap.
PHP | Mortgage Station Pty Ltd
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