Scenario is I own a piece of land freehold, now my husband and I wanting to build....
Can we get a building mortgage for the house or does the land need to be under both names?

acquisition1 - 2021-05-14 20:28:00

acquisition1 wrote:

Scenario is I own a piece of land freehold, now my husband and I wanting to build....
Can we get a building mortgage for the house or does the land need to be under both names?

You can get a mortgage subject to meeting any lending criteria but your husband cannot as he has no legal interest in the land to secure the mortgage against.

Edited by johnston at 8:42 am, Sat 15 May

johnston - 2021-05-15 08:41:00

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andrew697 - 2021-05-15 08:58:00

andrew697 wrote:

That's interesting Johnston.

Many years ago I owned a property solely in my name. I married.

About 2-4 years later we wanted to re-mortgage the house. We did manage to get a new mortgage in both names registered against my property.

because one is merely a guarantor. Many years ago .

gabbysnana - 2021-05-15 09:05:00

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andrew697 - 2021-05-15 09:12:00

andrew697 wrote:

From memory (it was a while ago) we were both working, and both down as mortgagors. I can't remember anything else about it i.e. whether husband was down as guarantor or not!

Surely you were mortgagees?

shanreagh - 2021-05-15 09:57:00

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andrew697 - 2021-05-15 13:29:00

acquisition1 wrote:

Scenario is I own a piece of land freehold, now my husband and I wanting to build....
Can we get a building mortgage for the house or does the land need to be under both names?

When you say freehold, do you mean it is mortgage-free?

pico42 - 2021-05-15 13:35:00

andrew697 wrote:

From memory (it was a while ago) we were both working, and both down as mortgagors. I can't remember anything else about it i.e. whether husband was down as guarantor or not!

Nobody can give security over an asset that they don't own.

amasser - 2021-05-15 13:53:00

amasser wrote:

Nobody can give security over an asset that they don't own.

The house was in both names, the land title is in one name?

If I get it right.

smallwoods - 2021-05-15 15:28:00

Mortgage was in both names and the title in one perhaps? Our bank did not like this scenario.

shanreagh - 2021-05-15 17:14:00

andrew697 wrote:

No, we were mortgagors i.e. a mortgagor is a person who borrows money from a lender for real estate.

True......got confuzzed! Years in the industry and of course I know that....Sorry.

shanreagh - 2021-05-15 17:15:00

pico42 wrote:

When you say freehold, do you mean it is mortgage-free?

Yes I am picking that they have a freehold section with a fee simple title, as opposed to a leasehold section and the section has no money owing on it...mortgage free as you suggest.

Edited by shanreagh at 5:18 pm, Sat 15 May

shanreagh - 2021-05-15 17:18:00

andrew697 wrote:

From memory (it was a while ago) we were both working, and both down as mortgagors. I can't remember anything else about it i.e. whether husband was down as guarantor or not!

Was the title transferred to you both?

johnston - 2021-05-15 19:33:00

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andrew697 - 2021-05-16 05:54:00

pico42 wrote:

When you say freehold, do you mean it is mortgage-free?

Correct, there is no mortgagee on the land...

acquisition1 - 2021-05-16 13:23:00

andrew697 wrote:

From memory (it was a while ago) we were both working, and both down as mortgagors. I can't remember anything else about it i.e. whether husband was down as guarantor or not!

You probably would of been - but ultimately, the security was the property, so if the loan was defaulted and the mortgagors did not settle the debt, then the property (which - yes - was solely owned by you) could of been used by the bank toward settling the debt. Many people don't also take on the gravity, that in the event of the debt not being settled by the sale of item held in security, ie the property, they still have debt of the outstanding amount to the bank - and that each party is liable for the whole debt ie if one can't pay their 'portion' then the other is liable also for the total amount. As to whether the property has to be in 'both names' - that I guess is up to the mortagee, and the terms of the loan which they are prepared to offer.

Edited by brouser3 at 1:46 pm, Sun 16 May

brouser3 - 2021-05-16 13:42:00

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andrew697 - 2021-05-16 17:25:00

johnston wrote:

You can get a mortgage subject to meeting any lending criteria but your husband cannot as he has no legal interest in the land to secure the mortgage against.

When a person owns a property and meets someone, marries them and then they live in the property as the family home, that person is then entitled to half the property as relationship property.

mrcat1 - 2021-05-16 18:37:00

mrcat1 wrote:

When a person owns a property and meets someone, marries them and then they live in the property as the family home, that person is then entitled to half the property as relationship property.

Lol. They don't have to be married and not necessarily any entitlement. They may have a contracting out agreement. The owner may have transferred the property to a trust but then they wouldn't be the owner.

If what you were really commenting on was my reference to legal owner. I was differentiating between a legal owner and a beneficial or equitable owner.

johnston - 2021-05-16 19:39:00

mrcat1 wrote:

When a person owns a property and meets someone, marries them and then they live in the property as the family home, that person is then entitled to half the property as relationship property.

If only it were that simple - there would be a lot of legal professionals without jobs.

brouser3 - 2021-05-16 19:51:00

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andrew697 - 2021-05-17 06:55:00

andrew697 wrote:

Not 38+ years ago when I married ....

I believe (but am not 100% sure that you had to be married 2 or was it 3 years before property was split in event of a divorce.

The PRA came into effect in 1977 and applies to defacto etc couples. I don't know if that has always been the case.

johnston - 2021-05-17 07:55:00

Ah, the old days when sometimes it was only the male's name on the title and in the ASP it was "his wife" or homemaker" or something like that.

johnston - 2021-05-17 14:30:00

johnston wrote:

Lol. They don't have to be married and not necessarily any entitlement. They may have a contracting out agreement. The owner may have transferred the property to a trust but then they wouldn't be the owner.

If what you were really commenting on was my reference to legal owner. I was differentiating between a legal owner and a beneficial or equitable owner.

It was in response to your post 2, interesting you say the husband couldn't get a mortgage as he doesn't legally own it, where as if they split after 3 years with no contracting out agreement and it had been the family home he would basically be entitled to a half share even if he wasn't on the title.

mrcat1 - 2021-05-17 19:55:00

brouser3 wrote:

If only it were that simple - there would be a lot of legal professionals without jobs.

It is that simple.

mrcat1 - 2021-05-17 19:55:00

mrcat1 wrote:

It was in response to your post 2, interesting you say the husband couldn't get a mortgage as he doesn't legally own it, where as if they split after 3 years with no contracting out agreement and it had been the family home he would basically be entitled to a half share even if he wasn't on the title.

A half share of the proceeds or value but not necessarily a legal half interest in the property.

johnston - 2021-05-17 20:37:00

johnston wrote:

A half share of the proceeds or value but not necessarily a legal half interest in the property.

Or take the property and pay them a half share if they cant raise the money to pay the hubby out.

mrcat1 - 2021-05-17 22:29:00

Our property is in MY name(married 30yr but never bothered to change it)My wife is a co-mortgagee though and she was able to help daughter buy a house by taking out a separate mortgage from ours, using our house as collateral.That mortgage is in her name only. 3 yrs ago.

blueviking - 2021-05-18 07:13:00