Buying into an existing Mortgage

[HBFlanker]

I dont really know if i am wording this correctly but i'll have a go at an explanation.

My Girlfriend owns a property in melbourne. She came into some money a couple of years ago and purchased the property for $550,000.
She paid a deposit of $125,000 to get the place. It has been rented out for 2 years (in October).

My question is, is it possible for me to get the mortgage changed from just her name to a joint mortgage between myself and her? are their additional costs etc?

 

[Run n Spread]

It should be possible. Just apply to the bank where the mortgage is to change the name on the loan. Considering banks have a fee for everything else there would be a fee for that.

Now I'm going to make an assumption here and assume you and your girlfriend are moving in together and making things more permanent. If that is the case and you want to pay off the mortgage together you would probably looking at changing the house title over to joint names? (Otherwise why are you paying off a mortgage together). You would probably need a soliciter for that in terms of changing the title deed and implementing a share of the property. e.g. 50-50, 60-40 etc.

So you basically have two separate processes.

 

[bulldogsfan]

My understanding is you'll need to refinance for the mortgage and do a transfer of ownership - on the transfer of ownership she'll have to pay CGT possibly (for the 50% of ownership she's selling to you - or otherwise other percentage) - but may be within the 6 year ATO rule. Check with your accountant.

You will have to stamp duty on your percentage purchase and also get mortgage insurance most likely. Then there are some legal fees involved.

That's my understanding.

 

[Power Raid]

I dont really know if i am wording this correctly but i'll have a go at an explanation.

My Girlfriend owns a property in melbourne. She came into some money a couple of years ago and purchased the property for $550,000.
She paid a deposit of $125,000 to get the place. It has been rented out for 2 years (in October).

My question is, is it possible for me to get the mortgage changed from just her name to a joint mortgage between myself and her? are their additional costs etc?

You will have to transfer ownership which will trigger 50% of the total stamp duty normally payable.

 

[Power Raid]

I dont really know if i am wording this correctly but i'll have a go at an explanation.

My Girlfriend owns a property in melbourne. She came into some money a couple of years ago and purchased the property for $550,000.
She paid a deposit of $125,000 to get the place. It has been rented out for 2 years (in October).

My question is, is it possible for me to get the mortgage changed from just her name to a joint mortgage between myself and her? are their additional costs etc?

CGT may also be triggered

 

[Visions]

I dont really know if i am wording this correctly but i'll have a go at an explanation.

My Girlfriend owns a property in melbourne. She came into some money a couple of years ago and purchased the property for $550,000.
She paid a deposit of $125,000 to get the place. It has been rented out for 2 years (in October).

My question is, is it possible for me to get the mortgage changed from just her name to a joint mortgage between myself and her? are their additional costs etc?

Deal with this on a regular basis. Normally lenders won't allow another person to be added as a joint applicant to a loan unless they have something to gain from it (such as in a spousal relationship). In your case the only way you would be allowed a joint mortgage would be if you did transfer onto the title to show ownership.

As others have mentioned, this would trigger stamp duty costs calculated on half the market value of the property. However in Victoria there is a full stamp duty exemption when a person sells to their spouse OR domestic partner (i.e. de facto). Now I don't know if this is applicable to you but it might be something that you could look into as it can save you heaps.

There may also be CGT issues on her behalf if the property has gone up in value and dependent on the purpose of the initial purchase and when it was bought.

 

[HBFlanker]

Deal with this on a regular basis. Normally lenders won't allow another person to be added as a joint applicant to a loan unless they have something to gain from it (such as in a spousal relationship). In your case the only way you would be allowed a joint mortgage would be if you did transfer onto the title to show ownership.

As others have mentioned, this would trigger stamp duty costs calculated on half the market value of the property. However in Victoria there is a full stamp duty exemption when a person sells to their spouse OR domestic partner (i.e. de facto). Now I don't know if this is applicable to you but it might be something that you could look into as it can save you heaps.

There may also be CGT issues on her behalf if the property has gone up in value and dependent on the purpose of the initial purchase and when it was bought.

Thanks heaps mate, appreciate it, Looks like i will be eligible for the stamp duty exemption which is a massive bonus.