Buying in wife’s name

For an IP loan, are there some lenders that allow a purchase in one name (wife), but with 2 people on the loan contract (husband and wife) - ie. loan is serviced by husband and wife’s income. This was allowed in the past, but wondering whether the rules have changed. Regards Harry10 (previously Harry30).

 

Yes this is allowed with majority of banks as there is a substantial spousal benefit in rhe transaction

 

bumping old thread

how can the loan name be under husband+wife if security is only under wifes name?

is this done as a
loan name: wife
gurantor of loan: husband?

i want to do the same but wife has zero income and not sure if banks really allow this?

 

As long as servicing is ok it can be done. You dont need to be a "guarantor" you'll just be a joint borrower.

 

thanks that i didnt know always assumed loan name = title names

if so can wife still claim all i% deductibility as she is beneficial owner of property? or loan is 2 namee so only 50% of interest is deductible for her rental income?

 

Wife claims 100%. It goes on the ownership, not the loan.

 

Bump..
If the ownership is only in wife's name, can the loan also be transferred completely to the wife from husband at a later date, if wife's individual serviceability can support it? In the OP's example:

Before: Loan (combined) Ownership (wife)
After : Loan (wife) Ownership (wife)

Which banks will allow this ?
​

If yes:

1. What is the husband's residual financial liability WRT borrowing capacity? Assuming no other asset/liability, does the husband improve his borrowing capacity (while reducing hers) on transfer of loan?
2. Does the new arrangement provide any asset protection for the family, since now the asset is singularly owned and mortgaged?

 

Yes ..loan can be refinanced back under wife's name only..assuming borrowing is no problems

1 - borrowing power could increase since no debts are shared in joint names

2- depends if there are other asset held in joint names - but best talk to a lawyer

 

Buying in 'wife's name' indicates she is acting as trustee for you.
Or do you mean your wife is buying a property?

 

Not if it is a trust relationship

 

No.

You mean removing the non-owner spouse as a borrow? All lenders allow this, subject to meeting the other requirements such as serviceability etc.

None as he has no debt. It would improve his borrowing capacity.

Asset protection from what? For creditors of the wife it would generally worsen asset protection. For creditors of the husband it would generally improve borrowing capacity.

On death of husband it would improve asset protection for the wife but worsen it for his heirs such as children of his with another mother.

On family law it would generally improve her asset protection and worsen his, but it would depend on a lot of other things

 

Thanks @Terry_w very informative. Explanation far exceeds the narrow question and puts it in a broader context than I could think of-- appreciated.

 

The decision to put a acquisition in one spouse name (with two borrowers) should also consider other issues

- Taxable income/s for future and marginal tax rates
- Family changes eg pregnancy, disability and not working
- Neg / pos gearing ?
- Asset protection
- Future CGT. eg a wife who is a low paid trainee today but plans to become a highly paid Barrister may be unwise.
- Land tax thresholds etc
- Citizenship and potential absences from Australia or non-residency
- Capacity to refinance in future (if they are not working)
- Legal liability issues eg The wife may not seek to assert rights to sole ownership if the matrimonal funds are used to buy, maintaina nd retain ownership

etc