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Kosher.......??

Discussion in 'Property Finance' started by Norwester, 22nd Jun, 2015.

  1. Norwester

    Norwester Member

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    22nd Jun, 2015
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    Location:
    Perth
    Hi all finance gurus,

    With regard to finance applications does this sound legit?

    Or is it just the done thing these days?

    "As I previously mentioned, your current income would not be enough to tailor your needs for a high enough borrowing capacity. I’m not sure why XXXXX did not mention that it was possible to increase said borrowing budget by introducing another applicant onto your application. This may be anyone immediate such as a partner or family member or friend. Of course their name would be on the application but if you are able to sustain the minimum weekly repayments once the house has been completed then this will entitle you to your own home."

    (extract is from an email received by my daughter in regard to financing)

    Ciao

    Nor

     
  2. wylie

    wylie Moderator Staff Member

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    It was suggested recently that I could add my son in as a 1% share for a loan I'm trying to get. This was from a broker (not from the old or new forum), and when I asked if that would impact on future loans my son may apply for, he agreed that it certainly would. Why would I put my son in that position, where our very large debt would cause him to possibly miss out on getting a loan in the future. I think it was very bad advice.

    We guaranteed this same son to the value of $50K for his first purchase but could also have given him cash towards his first purchase to lessen the loan he needed (but we didn't want to do that, and he wanted to do it on his own anyway).
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    That sounds like a terrible idea to me. If she can't borrow enough to fund her home, it's quite possible can't actually afford it. Dragging a 'friend' onto a loan application that she might not be able to afford is appalling advice, not just for her, but for her friend/relative!

    If it was a partner/spouse that might be different but I'm assuming that's not the case.
     
  4. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    You can't just add someone to the loan application - they must be on the title.

    The only time you are able to get around this is in a spousal/defacto relationship.

    So what they are saying really doesn't make sense unless the person being added is her partner.
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I agree with Jess - doesn't sound like a good idea and it's certainly not considered the norm.

    If an applicant can't afford a purchase on their own - they need to either a) improve their borrowing capacity position by increasing income/reducing expenses and/or b) adjust their expectations and look for a property of lesser value.

    There's also implications for joint borrowers going forward. For instance - if you went on an application with your daughter, you'd generally be responsible for the entire debt and would need to list that entire liability on any finance applications in the future. This will impact on your borrowing capacity.

    All in all - it doesn't sound like a good idea.

    Cheers

    Jamie
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Perth WA
    As Shahin said, the application AND the title. So the house would not be 'just' hers if she went down this route.

    Did your daughter go direct to the bank? If she did, there may be other options for her.
     
  7. Norwester

    Norwester Member

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    Location:
    Perth
    Thanks Guys & Gals,

    Yeah, thought it sounded suss.

    This was through one of those lovely mobs who do the house & the 1% deposit & finance, etc etc. Can't name them as they're locally based to me and quite litigious regarding posts on the internet that they don't like......

    Eg.....this was cut and pasted from a product review site where they obviously had a problem with their review......:(

    From XXXX Homes legal counsel;

    "We are the solicitors for XXXX Group (WA) Pty Ltd trading as XXXX Homes.

    Our client has been the subject of a number of posts on this forum which are factually inaccurate which misrepresent the true position. Our client welcomes any constructive criticism, however when posts are made containing untruths and which do not disclose all the relevant facts (which will then enable members to form their own views), then in those circumstances, our client considers that it is entitled to take the necessary steps to protect its reputation. We have written to the members who have posted such comments setting out the true state of affairs and requesting that these posts be removed. It appears from the terms of the “Message from the Editor”, that requests may indeed have been made of the forum by such posting members for such offending posts to be removed, yet despite this they remain posted on this site.

    In fairness to them though, the original person that she was dealing with basically told her to go away and save more money...........this gent however has represented that Mr Previous was in fact wrong (as per original post) and all she would have to do was.....blah blah...

    Anyhow, thanks for the info, myself and my youngest daughter appreciate it.

    Ciao

    Nor
     
  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Since you are in Perth and Jess knows her stuff - I would engage Jess and get her to give your financials and give you advice. Its good to get a second opinion.
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    +
    + 1 for da jess

    ta

    rolf
     
  10. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Agreed - second opinion is in order. Makes sense to hit up Jess.

    Cheers

    Jamie