Lenders Wanted

VIC, $350K, Owner occupied, Refinance, Full-doc, 35% LVR

Posted on 20/05/2014 7:21:32 PM

I have a client looking who with his family has lived in his parent’s home for the last 15 years.
The property is in the name of the parents, they look after the dad who still lives in the home as well, the mother now in nursing care.

They want to do some work on the property to all better fit and upgrade 1970's appliances.
The father has agreed as he will also benefit. As per discussions with both, this home will be left to the client via the fathers will.

LVR will be < 40%, facility around $350k, client easily services based on his income and commitments but the property is in the parents name.
They have investigated the possibility of transferring title but that will trigger stamp duty and have pension implications so prefer not to do this.

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  • Mary McGowan30/05/2014 2:23:49 PM

    Are mother and father both in good mental health to sign mortgage documents? Who is paying the existing mortgage?

  • David Phillips LoanSelect21/05/2014 5:02:31 PM

    I agree -need to have the son on the deed due to probable age issues and payment issues.
    I'd set up the new house ownership as a joint ownership for the 3 parties -parents and son so that a death of any owners saves extra costs as the ownership of the house reverts to the remaining survivors.survivors.Check with centrelink about gifting issues? Stamp duty will also be an issue unfortunately.

  • Stephen Rasmussen21/05/2014 2:57:19 PM

    I'm assuming that the parent's ages preclude them from obtaining a large enough reverse mortgage?
    Evenso, what is the mother's state of health? Would it put any question mark over her "capacity to act"?
    Can't really see anyway around the son coming onto title.
    Why not sell him a 35% - 40% share for the $350K, and then use the proceeds for the renovations?
    Does the son have other real estate in his own name? Is there an option to raise the finance against this?

  • Ken Dixon Resi Melb CBD21/05/2014 2:05:59 PM

    Each lender has different policy, but could transfer and have applicants as tennants in common as to 5% and 95% respectively of property or even more and pay stamp duty on
    the 5%. It could be argued they are putting up funds for renovation and have beneficial interest in the property.

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