Servicing Question

Hey brokers !

Quick question, if servicing is falling short is it possible to add another applicant?

 

Yes. A non owner spouse can be added. But non spouses would need to be owners

 

I have an app with two applicants (spouses) their falling short by 10K... what do you mean by non owner spouse?

 

Someone they aren't married to. It's hard adding a third person. They have to go on title as well, might not suit many people, there are lots of drawbacks, joint and severally liable, missing out on fhb discounts etc. better to get another opinion, doesn't sound like your falling short by much another lender might have a better calculator.

 

You could suggest to them that they each marry someone else and have them guarantor?

a non owner spouse is a spouse that is not on title to a property.

 

Which lender is servicing falling short with? Different lenders assess borrowing capacity differently so you may be able to avoid adding a third party applicant and still borrow.

If you add an additional applicant who is not a spouse, lenders will generally require you to have them on the title as well to ensure they are deriving a 'benefit' of being on the loan.

 

That's a big shortfall - if it's a ppor then I'd question whether they can actually afford the purchase.

If it's an IP - then Corey's comment is on the money. Different lenders have different methods of calculating max borrowing so workshop the scenario with a few.

Cheers

Jamie

 

Its possible (they need to go on the title). This solution is rarely the best given all the legal/tax/future financing consequences involved. There aren't really any lenders that do servicing guarantees either anymore.

Try other lending solutions that don't involve new borrowers (different lender calcs), gift to make up shortfall, etc.

 

Also consider a tax relationship.

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