Lending Criteria changes when asset under wife's name?

Hi all,

Hoping you can share me the charges of having to call my accountant for what I would think is a simple question.

Wife and I are going to buy PPOR.

Our current liquid assets are 50/50 equalling $120,000 and if I close off my last deal at work before resigning and studying I should have an additional $50k. No debt between us.

My ultimate plan will be to have the house under her name for asset protection.

Would final ownership affect any aspects of the lending criteria between having 100% in her name vs 50/50% - especially when cash and other assets are in joint names?

 

Yes. Many lenders will not want to lend for an owner occupied property where it is legally owned by one yet 2 on the loan. Will you be needed on the loan for servicing?
Assets won't matter too much. get some credit advice.

Also having her only own it doesn't necessarily equate to asset protection either. Get some legal advice on this aspect.

 

Thanks Terry, really appreciate this.

I've had a chat with our financier, my wife's income will be sufficient for servicing. I'll let you know what my accountant says re: legal structure.

 

Accountant? Why not lawyer?

 

Genuine question. Why would you structure a ppor as anything other than in personal names other than to provide asset protection? Put it in a structure (trust, companty etc) would surely remove the benefits of CGT free at the end and remove any government purchase incentives at the start.

 

This depends. It is possible to get the main residence exemption even when held in trust. And structure doesn't just mean what name it is in, but how it was funded and transacted. You could structure something so person A owns it but another person claims a trust over it years later - if it suits.

 

Let’s say you want to buy a property 100% in your wife’s name for various reasons.

However, for servicing, the loan needs to be jointly taken out in husband and wife’s name (ie wife has insufficient income to service the loan on her own).

In short, will any banks lend to a borrower (in this case the husband and wife jointly), in a case where one of the parties (in this case, the husband) has no ownership stake in the property.

 

Yes as they're husband and wife, co-borrower acknowledgement required of course - easy.

 

Thanks Lindsay,

For some reason, I thought banks would not strike a loan contract with a party that did not have an underlying interest in the asset that was held as security against the loan??

 

Loan Tip: Co-Borrowers, new requirements Loan Tip: Co-Borrowers, new requirements

might have to be a guarantor these days

 

No problem,
Husband and wife can do this fairly easily without needing to be guarantor instead of co-borrower, if unrelated party it's likely not gonna work.