Buying in GFs name

Now I'm sure this has been discussed previously but I can't seem to find the answer.

I understand that to maximise borrowing capacity it is best to buy in one persons name, so the plan would be to buy and borrow the money in my girlfriends name. The problem is the deposit and stamp duty would have to be a split loan from one of the IPs in my name.
How do you go about doing that and how does that affect everything come tax time?

Who is the best person to discuss this with? Broker, accountant?

Any points in the right direction are appreciated!

Thanks

 

You don't buy in her name - she buys.
Seek legal advice about the various issues. You might need to lend her the money via a formal written loan agreement. She claims all interest.

A lawyer is the person to talk to about this.

 

This ^^^^^ doesn't make any difference to borrowing capacity. Borrowing capacity simplified is money in v money out and the surplus can be used to service debt at between 7- 8% due to lender buffering.

Also buying property with a GF/BF usually does not work out in my experience due to break ups and different and evolving goals.

 

Sorry, I probably haven't worded that properly.
I understand what you're saying.

Unltimately we want to buy it together we just don't want to ruin future borrowing capacity.

 

Thanks, I thought that I had read (somewhere on here) that if you owned half a property they still took the whole amount as your loan when looking for your next loan, maybe that was talking more about buying with friends/family etc.

 

That is called CDR (common debt reducer) and there are a few lenders who will allow you to apportion debt according to ownership.

If you go halves with your GF and it is 100% in here name you will still be an applicant for finance assuming she can not service the debt on here own so still liable for the debt which is called "joint and several".

 

Friends or family if you don’t spilt from your gf then you are one so isn’t counted twice.

However if you spilt and keep the asset in both your names (doubt you would keep it) then the loan will be counted as full.

However if you put it all in her name and you spilt then you will have to try and fight to get something if she doesn’t agree.

Go seek legal advice but I would buy in both names if you are looking long term.

A reason why someone would buy in one name and not the other is for tax reason but they would need to have income to service the loan at the time so most would look at trusts.

 

Buying in one person's name does not increase the overall borrowing capacity. There are even circumstances where it can reduce the borrowing capacity.

Basically a couple has better borrowing capacity than the sum of two individuals.

There may be good tax, asset protection, legal and other reasons for doing this, but borrowing capacity isn't one of them.

 

I am concerned about the strength of your relationship with you GF and I have no idea, just by reading the question, about that.

If a person is your spouse then what you are saying potentially has some merit. If a person is not your spouse then I would be concerned.

I often see people approach these things with a marginal thinking attitude “if I do this extra bit now I can get a little bit more”. Sometimes the thinking should be “if I do this extra bit now I can lose it all”.

 

It will unless they want to go on joint loans from this point on.