URGENT! Can't get a Certificate of independent financial advisor

Hi all,

I'm buying a property with my name but I have put both my name and my wife's name under the mortgage.

The lender requires my wife obtaining a Certificate of independent financial advice .

I contacted 3 different financial advisors and accounts, with no luck. Two of them said they are not licensed to do it. One guy said it needs 20 hours of work costing 9k.

I went back to the lender explaining the situation, they came back insisting on this requirement. They also refuse to give me a list of financial planners that I can talk to.

Anyone knows what I can do to make it work?

Here's what the form looks like:

PART B Explanations Given
I CERTIFY that I gave financial advice in respect of financial risk the Borrower is assuming by signing the
documents. I DISCUSSED with the Borrower
• The viability of the transaction which the Borrower was undertaking;
• The Borrower’s ability to make the required payments to the Lender, and
• The Borrower’s ability to make payment to the Lender.
PART C Statements by the Person Signing Documents
FOLLOWING THE ABOVE EXPLANATIONS, the borrower stated to me:
• The viability of the transaction which the Borrower was undertaking;
• The Borrower’s ability to make the required payments to the Lender, and
• The Borrower’s ability to make payment to the Lender.
PART D Identification of Persons Signing Docume

 

I'm based in Sydney by the way

 

$9k is a bit steep but then the FP insurers tend to hate these things. I would expect to pay at least $1k for it.

 

Bizzare!

Legal advice would be more appropriate.
Who is the lender?

I think this sort of thing is going to be more common now because of a case that went to the financial ombudsman which went against the lender because they breached the code of banking practice as the wife didn't benefit from being on the loan.

I don't think you will find anyone to sign off on that without a statemetn of advice. If the wife hasn't got an income could the planner sign off on her ability to repay the loan?

An alternative may be for you to be borrower and the wife as guarantor?

 

I needed the same when lending through WBC for both my IP and my PPOR for the same reason being mortgage in both names (defacto and me) and title in one name (me) only.

I got mine from a local retired solicitor who was still doing a bit of legal work who sat down with my wife, the mortgage documents from WBC and the Contract of Sale and explained to her what was involved in relation to her liability for the debt even though the property was not in my wife's name (she already knew but WBC just wanted this to be validated).

Back when we bought in 2010 it was simply a WBC form signed by my wife and "her" solicitor but from memory it was no different in content to that of the text you provided above but may have stated legal rather than financial advice back then so I would have to dig it out from the archives to validate. Cost us a grand total of about $150 and about 10 mins.

Funny thing was when I refinanced to CBA in 2016 under the same arrangements I did not need any thing in relation to independent financial advice for my wife.

 

We are seeing some transactions with trusts where the lender wants a certificate of independent legal advice (ie can't be the conveyancing solicitor) for the individual guarantors and a certificate of independent financial advice.

 

T

They also need a separate legal certificate. Here's what it looks like

PART B Explanations Given
I CERTIFY that I gave advice in respect of the documents specified above and I explained to the
borrower(s) that if the borrower(s) do not make all payments on the due date or if there is any other
default, the lender could demand repayment of the debt and sell up any security provided by the borrower
or any guarantor.
PART C Excluded Explanations
I INFORMED the borrower in very clear terms that I was not expressing any opinion nor advising on:
• The viability of the transaction which the Borrower was undertaking; or
• The Borrower’s ability to make the required payments to the Lender
I FURTHER INFORMED the borrower that if in any doubt on those aspects the borrower should obtain
independent financial advice before signing the documents

 

Do you know if the retired solicitor is still able to help?

 

One alternative is to change to tenancy in common giving my wife 10% or more. The additional conveyance cost is 700 or so.

The property will be cash flow neutral at the current interest rate. The rational for putting it under my name is it offers protection against rising interest rate through negative gearing.

I do realise it is more beneficial to put it under my wife's name to reduce the capital gains tax.

If I do tenancy in common, what's a good split proportion?

Thoughts?

 

When I did a development within a unit trust, the loan was in my name and the trustee was guarantor.

I (in my capacity as director of the trustee co) had to get sign off that we understood the risk of being guarantor.

Happy to provide details of person I used if you want to pm me, but they're in Adelaide which may not suit.

 

Just for reference, what's the cost like? Was it both legal and financial advice or just financial?

 

It was both, but I found one person dual qualified. I don't recall the cost, but it was minor - in the vicinity of 1 hours advice.

I helped the process along by demonstrating my understanding of the scenario, which put them at ease.

 

A lot of financial advisers don't understand the lending side and why/how often banks ask for these so will shy away from them in general. If you do find one which will do it, they will absolutely require a statement of advice and appropriate implementation of it to ensure everyone is covered sufficiently.

We do these regularly in the office for our clients, holistically ensuring the lending, advice and protection is all aligned.

What lender is this with?

 

I could do the legal one, but my fees are high. There are other Sydney lawyers on the forums who could also do these.

Corey would be good for financial advice side.

 

Changing ownership has far reaching consequences.

Wouldn't it be easier to just change lenders?

 

That's what I'm thinking - the structure is quite common and rarely requires a FA signoff, it comes up more in trust guarantee scenarios.

 

I think you are confusing mortgage and loan here. The mortgage would be given by the owner which would be you, but the loan was in both names.

I have done multiple loans with Westpac where title was in one name with the loan in 2 and never had to get any sign offs.

 

Or go the guarantor route - then a FA sign off would not be needed possibly, but the legal advice may still be.

 

Loans.com.au

Are you able to help with the financial advice side? What's the indicative cost? Can you PM me the details?

 

Lol. Apologies. Did you have any other trouble getting your loan approved with loans.com?