Hopefully someone can assist here.
If you hold an existing home loan (joint ownership with partner), and you intend to apply new new investment home loan(just under your name), why bank needs to verify ID and income of partner?
Loan and Partner Income Verification
Ash-Say on 10/04/2024 - 16:44
Comments
This.
There are plenty of stay at home mums that are on a mortgage without an income. Taking a working partners income into account on a joint loan then provides greater borrowing power when applying for a secondary loan in there sole name.
Without that income being assessed the bank is required to assume the person is carrying 100% of the original joint loan.
These are called Common Debt Reducer products.
Isn't it obvious? If it's in both your names, then they have to verify the financial status of both.
If you don't want them to verify your partner's account and you think you're capable of servicing the loan yourself, then take their name off.
then take their name off.
They have.
oh my bad. I didn't get that far in reading! lol
If the original home loan is in joint ownership, they'll look at that as collateral/security for the new loan.
they'll look at that as collateral/security for the new loan.
The collateral would be in the new property.
Because bank need to know the financial details of your other join owners. Imagin you have a gf, you probably want to know her family background, before marry her lol ☺️
of your other join owners
It's not a joint ownership.
If you hold an existing home loan (joint ownership with partner)
I was referring to OPs current loan arrangement.
Current OOP is joint ownership but the new home loan (different property) will be just under my name. It's actually loan refinancing where I am sole owner of IP.
No bank has ever asked for this info in past whether it was IP's original loan application or any credit card.
May be I wasn't clearer in original post but hopefully it is more clear now.
No bank has ever asked for this info in past whether it was IP's original loan application or any credit card.
Asked me few times when I go through a mortgage broker. Maybe not if its from the same bank with the exciting loan, as they already have the info.
Are you using the jointly held house as collateral for the new loan?
Good point! she would need to be guarantor if using the shared security.
No
This is completly different property which is being refinanced and I am the sole owner. Have this loan for over 5 years and just looking to refinance.
Then don't tell them you have a partner.
@brendanm: Hahah
How am i supposed to hide partner on loan statements?
Anyways it will be providing wrong info
Is the bank you are using for the new property the same as the one which you currently have the loan on your PPOR? If so, it sounds like they are cross-collateralising.
@djkelly69: Exiting OOP, existng IP and refinancing institution are all different banks i.e. 3 different banks and not even linked/associated with each other.
@Ash-Say: well, if you can service 100% debt on your own income…and there is no cross-collateralising I don't see the need for the partner info…
…if my partner applied for a loan that had nothing to do with me and they did a credit check on my I would not be happy!
…they are possibly looking at options to offer to refi all to one bank where they may need partner income?
I would question how they intend to apply their privacy policy to your partners personal income details if she is not on the application as borrower or guarantor - I assume she has signed a privacy statement?…the Banks I have worked for have simply used 100% of the joint debt for the sole applicant and allowed for joint living expenses…if that wasn't affordable it then needed to be in joint names…
They have sent a form for partner to sign to allow them to verify income and I can also see credit check related clause.
Not sure how it is even applicable considering the partner is not part of application or owner of property being refinanced.
Because it is reverent to whether you can afford to service your joint loan and your investment loan.
What you are doing is a "common debt reducer" (you can google that). Without your partners details they would need to be sure you can cover 100% of both loans on your own. Under a "common debt reducer" they assess your partners income in the serviceability of the joint loan.
Banks need to be sure you can afford the loans they are giving you (even if refinancing). It's not about your partner, its about how much they can afford to pay into the joint loan to give you greater borrowing power on the investment loan.
they would need to be sure you can cover 100% of both loans on your own.
Which might not be an issue for the OP, so why don't the bank do that first ?
@jv: Because banks typically assume that you want to present your strongest possible case. If you think that you are likely to still be able to get an additional loan even if you're assumed to be paying 100% of repayments on the home loan you can normally request that the bank process the application without that information, however you run the risk of having a declined credit application appear on your credit report.
declined credit application appear on your credit report.
Australian credit reports don't state if a loan was approved or not, just that is was applied for and usually how much.
Ask the bank why and if it’s necessary & consider another lender if it’s too much of a hassle. Some banks like to be difficult
yeah, they hate having customers…
It’s the people who sit in risk & compliance that have no idea on customer service that introduce these policies and very hard for the retail banking hierarchy to argue against it
While I agree with you on that point there are many more moving parts than one department/arm designed to protect the bank in this heavily regulated industry…its the (necessary) regulations imposed on banks that drive that monster…I would argue its the rest of the bank, generally, who are customer centric. No customers - no bank
Because you cannot service both the loans just with your income, as per bank calculations. Technically they shouldn’t even offer the new loan to you but they are happy to take a risk if they are satisfied with the fact that you don’t pay all off the home loan and some of it is paid by your partner’s income.
Are you making your own assumption?
Where did it say i cant service both loans even with my own income?
Because they won’t ask for your partner’s income etc if that wasn’t the case.
To be fair yours was more of a tweet than a forum post…assumption will be made
Tell the bank that your partner caught you with another chix. They will leave her alone.
Why don’t you ask the bank?
Are you married or defacto? At the end of the day if it all goes tits-up they are coming after both of you.
Quick story, a mate had a girlfriend he was living with for a year. They broke up, she was legally entitled to half his super.
Be careful out there guys.
I work for a big 4 bank, they would ask for your partners income along with statements of position if you cannot service the new loan and your current loan with only your income .
OP is there any update to this? Did you ask the bank and get an answer?
Partner has been removed following my enquiry.
Presumably in order to confirm that you aren't carrying 100% of the cost of servicing your home loan, only 50% of it. Just because a loan is in two names doesn't mean that both people are making an equal contribution to paying it off.