Advice Sought on separation reversal impact

[TAG]

About a year ago, my husband and I split up, and he subsequently purchased his own place with the equity payout from our PPOR (which I kept). We also have a rental flat that is still jointly owned between us.

Re-configuring mortgages was pretty tight because we only just had barely enough equity to cover 20% for each of our PPORs + 40% for our rental. But we've been with Westpac for a while so we squeaked by.

Now - post counselling and communication lessons - we are considering getting back together again.

My worry is what this will do for the properties.

We don't have enough equity for a single PPOR plus 2 rentals at 40%

We don't want to sell either property - mine because it's in a great area and needed for our child's school zone, and his was purchased at the peak of the market and we will not only get a good 10% less but also get hit by RE fees.

If we decided to rent out one of the PPORs and move in together (even short term to see how our marriage reconciliation goes) what are we obliged to disclose to banks? What are the chances of them forcing a mortgagee sale?

thanks in advance for your help!!

[Wellington Broker]

Don't need to disclose anything to the banks as under the Reserve Bank requirements there are no LVR restrictions on existing lending. Only issue would be any future change of ownership or sale/purchase.

Up until a month ago Westpac were writing new business for owner-occupiers with 10% deposit

[TAG]

Thanks for that, Andrew. Is that the case also when the fixed term of the loan comes due and we need to re-fix it? i.e. is this still treated as existing lending?

[Wellington Broker]

Yep would still be existing lending at refix time. Only time you may have an issue is the changes mentioned above or borrowing more with a loan top-up

[Anthonyacat]

While Andrew is absolutely correct that the LVR limits shouldn't apply to you, your own bank most likely has terms and conditions on which you're obliged to disclose things like a home becoming a rental, etc.

I'm not saying you necessarily should tell them (I'm sure most people wouldn't, in your situation) but to say you're not obliged to tell them is probably not correct.

[TAG]

Good to know - thanks guys!

[MikeO]

Hi - I hope your reconciliation works out. One thing to be careful of (probably top of your mind anyway if you have already been through a separation). I would assume if you are moving back together into your property it will (in time) become the family home under the relationship property act while your husbands home might be considered separate property. Might be worth getting some advice on that..?

[TAG]

Hi Mike, thanks for that thought and advice. You're right that I want to be a bit careful around who owns what - I'll have to think about how to manage that!

[mrsaneperson]

Hi Mike, thanks for that thought and advice. You're right that I want to be a bit careful around who owns what - I'll have to think about how to manage that!

Possibly consider having a pre-nuptial type contract drawn up for both parties so if the getting back together arrangement does not work it will be much easier working out separation financially.

[PTWhatAGreatForum]

Hi Mike, thanks for that thought and advice. You're right that I want to be a bit careful around who owns what - I'll have to think about how to manage that!

Do you really want to get back together?

[Wayne]

Do you really want to get back together?

Im not sure that that was the advice the Op was seeking.
Maybe there is another forum for counselling that would be more appropriate for that?

[TAG]

Haha Yes Michael, I do. You just reminded me that MY PPOR is still registered in both our names in the council records and I need to sort that out.

[donna]

Yeah the pre-nupital or property agreement would be a good way to go to have something in writing and witnessed by lawyers etc after each obtaining separate legal advice. The good news is your eyes are wide open this time around - good luck with it all.

cheers,

Donna