If I'm added on the title of husband's property/loan, will my other property be at risk?

Hi,

My husband is applying to refinance his loan at another bank. Under the bank's calculations, they won't offer him a loan unless there is a secondary income available to service the loan.

I have a property of my own and I am thinking about helping my husband out with his home loan repayments. However, if I decide to go down this route, my name will have to be added to the title of his property. Let's say that his property is being offered as security for the loan. If an unfortunate situation arises where we cannot pay off this loan, will the bank pursue my other property to cover for any shortfall from the forced repossession and the sale of my husband's property?

Thanks in advance.

 

if you are own the loan you owe money. If you owe money and don't pay it back they can come after you and your assets so the answer is 'yes'.
However, the likelihood of this happening may be remote. First they will take the mortgaged property and then come after the borrowers if this is not enough to pay out the loan.

There is no need to add your name to the title. If you do that you would be up for stamp duty and he would be up for CGT. You can go on the loan without going on title.

Be careful about getting advice as I have seen people do things like this without realising the consequences.

 

I am in similar situation. I bought a house with my daughter to help her buying the house but my mortgage broker has added her to my investment property too but she is not on my title of the investment property.
So now she has the responsibility of loan of both properties without having the actual ownership of both properties. I find it very messy situation and trying to figure out the way to fix it.
SO yes please get proper advise and look carefully in future scenarios.

 

Do you mean added her to the loan? If so the loans must be cross collateralised, which makes it even worse.

Beware of brokers giving such advice (a general warning).

 

Yes Terry. It was all done in such a rush because the date of the settlement was postponed twice and the loan wasn't organised properly. SO I did not get in too much details and signed the paperwork.
He convinced me that everyone does it.
But now having my daughter's name on my investment property's loan scares me. I am really looking for people who might be able to help me to sort this situation out.

 

Yes it is best to unravel as soon as possible. You want one loan secured by just one property.

I have heard many similar stories with it only being discovered when the documents are for signing which is genearlly too late if there is a settlement due.

 

Your name won't be added onto the title but rather just on the loan. Yes your own property will be at risk if there is a default and repossession of his property

Thus if there is the slightest possibility of a default default you would consider putting your name on it. But then again he is your husband.