Joint ownership and equity

Hi there,

My brother and I recently inherited our late mothers property and we now use it as our PPOR. I'm looking to use the equity in it to finance an IP however how is this possible with my brother also owning the property. He may possibly have a poor credit rating too, does this matter? The type of investment property im after is a buy add value. Whether thats a reno, sub-divide or development.

Thanks in advance

 

There is a particular split product with the CBA which might work. You'd be the only applicant. Your brother would need to give an equity guarantee for the loan, but he wouldn't be a borrower.

It should work in theory, but I've never actually tried it for this particular scenario.

 

All owners need to give a mortgage over the property and either be on the loan or give a guarantee. You will both be liable for the whole debt.

 

A straight guarantee scenario will work for this. As Peter has mentioned CBA has a product which is particularly nice in how it treats this - some clients who want their own statements find it very useful.

But you do specifically want him as a guarantor, NOT a borrower otherwise the credit history will make it more difficult.

 

So whatever amount of equity I draw down on my brother guarantees with his equity of the same ammount?

 

Yes. You both own the same asset and lenders will only lend up to 90% of the asset value overall - 'your' loans and 'his' loans.

 

I've been scratching my head for a few weeks now so thankyou for your help.