Join Australia's most dynamic and respected property investment community

Names on application and contract of sale

Discussion in 'Property Finance' started by Philip_M_H, 3rd Apr, 2016.

  1. Philip_M_H

    Philip_M_H Member

    Joined:
    17th Feb, 2016
    Posts:
    6
    Location:
    Brisbane
    Hi,

    I just wanted to find out if we purchase a house with 4 applicants for the mortgage, can we use just two applicants on the contract of sale when purchasing? Also do all 4 names need to be on the title?

    Is the contract of sale the only names that can go on the title or can we add this before settlement?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Seek legal advice and lender advice.

    Usually only those on title can go on the loan. Certainly only title holders can mortgage.

    Contract of sale differing from the transfer is possible but there are stamp duty implication.s
     
    Meteor likes this.
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,782
    Location:
    Perth WA
    If it's two couples buying, you can all go on the loan without to much trouble assuming no hidden issues. But bear in mind that it will affect all loan applications that come after - there are huge implications for ongoing servicing.
     
  4. Marty McDonald

    Marty McDonald Mortgage broker Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    Contract will reflect the end title holders unless an amendment to the contract is made after exchange but before settlement.

    If it is a husband and wife lenders will allow 1 on title and both on the loan but as there will be 4 of you here I would suspect the lenders will want all borrowes to be mortgagors ie all 4 on title.
     
  5. jpcashflow

    jpcashflow Well-Known Member Business Member

    Joined:
    21st Jun, 2015
    Posts:
    371
    Location:
    Melbourne
    Good morning 4 people buying a house together sounds like trouble to me.
    I would look at seeking legal advice!!
     
    Gingin, Terry_w and larrylarry like this.
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Not necessary to amend the contract. Can settle by direction - those not on the contract can end up on title. But there are stamp duty implications.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,161
    Location:
    Canberra and Sydney
    This can't be stressed enough.

    I see it all the time - new clients who can't service additional debt because they hold mortgages with other parties.

    Cheers

    Jamie
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Firstly, consider not doing this with others.

    Secondly, if you want to do it then instead of 2 couples on title you may want just one of each couple on title. So 2 names instead of 4.

    BUt then consider what happens if
    - one wants out
    - one dies
    - family law
    - one not doing anything to help
    etc
     
  9. Philip_M_H

    Philip_M_H Member

    Joined:
    17th Feb, 2016
    Posts:
    6
    Location:
    Brisbane
    Thanks greatly for the big response,

    We want to purchase a property for my partner and I. The other 2 names will be my parent-in laws.

    • Im an aussie and my partner is only a permanent resident.
    • In-Laws are living overseas.
    My parent In-laws have a investment property already here, which we manage. So the idea was to purchase another property using the equity from the investment property. We have decided to grow a portfolio together in Aus with me and my partner doing all the ground work and the in-laws are basically providing the finance. Eventually we want to have most properties in mine or my partners names or trust etc for tax purposes. As we are going to use the same bank (I know this can be risky) to make the overseas docs etc transaction smoother for this next one we need all 4 names on the mortgage app, but we not sure if we need to have all names on the contract even though we want to register all 4 names on title. Or if we were able to have just my partner and my name on title, thoughts?
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    You don't need all 4 names on the contract to register 4 names on title, but there are consequences so seek legal advice.
     
  11. Marty McDonald

    Marty McDonald Mortgage broker Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    The contract should reflect the eventual title holders / the proposed new owners of the property. You can't have an unrelated person A on the contact and personal B on title. It's all of you on title and loan or if they are happy to just provide equity then it could just be you 2 on title and loan. It really depends on where the income is as to how I would suggest you structure it.

    On that I'm a bit concerned by what you have said. You need to grasp the basics of how the contract / title thing will work before jumping in on the loan stuff. It sounds like you are going to cross collateralise straight off the bat too. Why?
     
  12. myotherac

    myotherac Member

    Joined:
    19th Oct, 2015
    Posts:
    12
    Location:
    sydney
    A question sort of on the same topic.

    - I am a Medical Practitioner (specialist), able to obtain 90% LVR loan from most banks.
    - My wife is non medical and can get 80% LVR. She owns in her own name an IP in inner ring Sydney (bought $1.34m in 2014) with a CBA SVR I/O loan at 80% ($1.072m) and a further ~20% ($255k) as a split from our own PPOR. Loan is in her own name.
    - CBA interest rate is OK after calling the mortgage retention team but not as sharp as others have mentioned on this forum (4.57% or 1.3% off).
    - Her IP has gone up in value in mean time. Recent valuation obtained confirms this (CBRE - $1.5m)
    - She is thinking of refinancing to get a better rate and release equity.

    Our question is, are there any lenders that will have allow both of us on contract (I am not on the land title) and allow 90% LVR (Medical) and give a better rate? This would allow the house to be ~100% LVR secured by itself. Servicing for either or both of us is not an issue and there are no bad credit issues. May have issues with exposure to Westpac Group/St George.
     
    Last edited: 6th Apr, 2016
  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    both on the loan but one on title?

    Yes I have done this for the 90% no lmi loans with Westpac. Most of the majors should do it.
     
  14. Marty McDonald

    Marty McDonald Mortgage broker Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    Yes concur with Terry. No issues.
     
  15. myotherac

    myotherac Member

    Joined:
    19th Oct, 2015
    Posts:
    12
    Location:
    sydney
    Thanks for info. Will keep this in mind and re consider my options.