My partner has just recently received her settlement from her divorce and wants to buy an investment property. She needs to borrow around $150k but is currently unemployed so no one will finance her even though she wants to buy a CF+ property.
The mortgage brokers we’ve spoken to have said that if I go on the loan application as well she should get the funds. But this is where the problems start.
We’ve been together four years but don’t live together and our both renting. The relationship has had its fair share of ups and downs Along the way.
She doesn’t want my name on the title in case things go bad a year or two down the track and I try to claim half of the property. I won’t be putting any money towards it, just my employment security and annual wage figures.On the other hand I don’t want to put my name on the loan and then if things go bad with us and then she defaults, I’m liable for the repayments. Or she can’t get tenants in for a period of time I’m also left having to pay the loan with my own money.
Obviously if she gets a job in the near future then 3 months later she can possibly refinance Into her name. Or we stay together and get married and we don’t have any problems, but that’s in a perfect world and we both want to make sure we’re covered in case the worst happens as we’ve both been bitten before.
So is there a way we can do this and still protect our own interests?
I wouldn’t do it Troy.
You already have doubts and don’t feel comfortable with this. Give it a miss.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I had a forum member ask for my assistance over a similar matter than went wrong.
Girl had a joint loan with ex and did a parental guaratee as well. Property prices dropped, ex did a runner and about 8 years later they are still paying a loan off with the property long ago sold.Terryw | 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
Hmm given the doubts, id steer clear away from this.
Cheers,
RedomRedom Syed | Confidence Finance
http://www.confidencefinance.com.au/
Email Me | Phone MeHome Loan Specialists based in Sydney, serving clients Oz wide.
If you’re entering the conversation questioning whether it’s a smart idea, I think you know the answer.
I’d give this one a pass if I were you.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
It’s not so much that I have doubts. Despite our problems we’ve been together almost 4.5 years and have always said we would get married and move in together. We can’t at the moment as she can’t move out of the area she’s in until her daughter finishes school.
We’re both keen to purchase an investment property together but we both just want to protect our own interests just in case.
Is there a way we can do this as a sort of joint venture setup?
So like if she puts in $350k plus another $50k from our joint $100k loan, and I put in the other $50k from our joint $100k loan then if we ever need to sell we get that % back? Obviously I would need to pay off my $50k of the $100k loan each month where as the rent will cover her share. Or say 89% of the rental return is hers and the other 11% is mine. We both put in 50% each of the mortgage repayments and 50% each of the costs. If things go pear shaped and we sell she gets 89% of the profit after costs and I get 11%. Is there a way a contract can be drawn up that’s would cover us both?
Yes you could be joint owners and have a private arrangement about who gets what. But under the family law act the courts can make orders to change legal ownership and to do this they take into account financial and non financial contributions of the parties.
Terryw | 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
What about contracts and pre-nups all that sort of thing? Surely they would protect us both?
Yes you could do a binding financial agreement, which is a contract.
Terryw | 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
So that would overwrite everything else such as family law etc?
BFAs are authorised under the family law act. If properly set up they are binding on both parties, but not properly set up would mean they could be set aside. They could also be invalid for a number of reasons. Costs to set up would be around $2000 to $5k
Terryw | 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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