Buying Property - Mortgage with Joint Name?

[chird]

I've been in China for 2 years, planning on buying a new apartment with my Chinese girlfriend next year or so. What's the deal with getting two names on a loan? Her 'lawyer friend' told her that you can only have one name on the mortgage, unless possibly if you are already married.

We've not got enough to buy a house out-right, so would be looking to get a loan from the bank for about 1/2. Buying it it my name is probably not an option because my income is based on overseas earnings and hard to prove to the bank that its stable. She on the other hand works in a Chinese bank.

Things would be easier if we just put it in her name, but that brings up other issues of course, like what if she was killed in an accident, or we got divorced or something. Since the vast majority of the cash will be mine, I'm uneasy about taking that route, although she advises that here in traditional China its common for guys to put the house in the woman's name. I know she's not trying to dupe me; I'm more worried about unforeseen circumstances.

Any ideas? Is getting two names on a loan easy? Do we need to be married? Are there any other advantages to having my name on the house that can be a good excuse for me to explain my feelings to her very traditional family.

Thanks

[anonymoose]

As far as I know, it is traditional for the house to be in both person's names, even if the guy ponies up all the money, but not only in the woman's name. At least that's how it has been in the few instances I've seen in the city.

You have to be married to get divorced, so I don't think your second worry applies. But on the other hand, I think you stand to lose more if the house is in your girlfriend's name only and you aren't married, because then you don't have much recourse if she walks away with everything.

[imron]

If the house and repayments are all (or mostly) being paid by you, make sure your name is on the property deed. Anything else has the potential for all sorts of hassle that you'll want to avoid. If you can't get your name on the deed, don't buy the property. Simple as that.

Whether the property deed and the mortgage are the same thing is a different matter.

Regarding traditions, traditionally the guy (or his family) provides the house not the girl, and in fact there were recent changes to the marriage laws such that in the case of a divorce, if the guy and his family provide the bulk of the money for a house then if the couple get divorced the woman doesn't have any claim on the house (not sure of the specifics, but that was the general gist). I'm not sure what traditions she is referring to when she says the house goes only in the woman's name.

Regarding marriage, if you're buying (or considering buying) a property together, your girlfriend (and her family) probably see you as basically married already, with the expectation that things will be made official before too long. Not sure what your plans are regarding this, just bear in mind that if you are planning to marry her then sooner rather than later will make things easier both in terms of the pressure she's probably getting from her parents (especially if she's older than 25) and also in terms of doing things like buying property, getting visas etc. If you're not planning on marrying her or are unsure if that's what you really want, then I would seriously consider holding off on buying property together until you are sure.

[kdavid]

If you're not married, and only her name is on the house, don't you lose all legal right to the house if you two split?

[chird]

Yeah I assume so, so I don't think I can go that way.

We do plan on getting married and our original timeframe was something like 'in 2 years time', but I guess my best recourse is to think of marriage before house, clearing up a lot of the above potential legal issues.

Maybe I'd been thinking about it backwards, as I'd been seeing getting the house first as a way to help her family accept me as a more stable marriage option. At the moment her folks are not really on board because I'm foreign. They're the type who want her to marry a dude from the same village who has a government job. I'm hoping to change their mind, bit by bit, because although my girlfriend would probably stay with me even if they hated me, she'd not be happy.

[kdavid]

I'd been seeing getting the house first as a way to help her family accept me as a more stable marriage option

If her parents want to throw "tradition" around, technically you don't have to provide a house until after you're married. And THEN, they have to fill it (with funiture).

At the moment her folks are not really on board because I'm foreign.

This isn't uncommon. I was in the same boat. They'll eventually get on board, especially if you two stay together for years to come. Eventually, she'll be too old for any other Chinese to want her. At the same time, she may get more pressure as her "age of eligibility" approaches.

Before you really start considering a house, you should consider your long-term plans.

When my wife and I got married four years ago (we've been together six), I was all for buying a house. However, now that my son is almost three, and I've re-evaluated my priorities, I've totally changed my approach to the future, and I'm glad I don't own property here.

Lastly, I have a friend who owns five houses here. I've helped him do a good amount of work on these. No joking, we've spent the last six months renovating two because, even though the bulidings were *just completed*, the work done by the Chinese workers was so poor that we essentially had to start from scratch. And I'm not talking about renovating a house with bare concrete floors, walls, etc. The building company completely f*cked up the entire architecture of the house. There are leaks everywhere, the plumbing and electrical is a mess, etc.

Case in point, one bedroom was ripe with mold. We had to strip, replaster, and paint the whole room. We left for the weekend. Upon returning on Monday, after a weekend of heavy rain, we found the room soaked. The "gutter" had clogged and flooded, leaking rainwater into the cement floor of the bedroom. Water leaked *up* the walls. Mold was growing all over again. Now we have to do that room all over again. The kicker, the "gutter" the building company constructed A) wasn't needed, B) was done half assed.

If I had ended up spending my hard earned money on a sh*t hole in this country I would likely have jumped off the balcony.

If you're really going to go forward and buy a house here, do a very thorough inspection of not only your unit, but those surrounding yours as well. Talk to neighbors and nearby restaurant owners. A house is a big commitment, and here in China it's likely to be a large sinkhole for your cash and energy.

[chird]

Wow. Yeah I've heard construction can be shoddy, but your examples really drill it home. I guess part of that problem is that people first pay a significant percentage before the house is in construction, then they wait a year or so for the place to be built, and then move in. How do they even know what it's going to be like, or to what level? Are there safe-guards in place at all? My Chinese mates were just like 'well dont buy a house in {vague area} because they're all shoddy'. My girlfriend was like 'dont worry my friend works in real estate we'll get a good deal'. I know this is China but entrusting so much cash because someone knows someone else makes me shudder.

I would have been up for buying second hand, but its almost unheard of in these parts, and the prices are significantly higher than buying one of the massive new constructions, due to government subsidies really. At least second hand you can see what you're getting.

What's my long term plan? I wish I knew. I'm not a goofball and obsess about the future all the time, but since I've come here a long term future has always seemed vague - 'I'll see where I am in 2 years time'. I'll just keep saving the pennies and re-assess the situation next year I guess.

[Scandinavian]

You might also want to consider if the millions of empty apartments allover China will eventually cause a property bubble to burst and thus making an investment now a bad idea.

I can follow the concept of buying second hand instead of new. Look into the cost of renovation. E.g. getting an entire apartment painted might not be too expensive. And I don't think kdavid's experience is unique. We've looked at many (and I do mean MANY) apartments, albeit for renting, where the first owners have just lived for short periods (6-12 months), and the places looks wrecked. If I were to buy second hand, I would mentally prepare for doing a full renovation before moving in.

[imron]

I know this is China but entrusting so much cash because someone knows someone else makes me shudder.

Knowing someone who knows someone doesn't guarantee good quality either. It just means you won't be as good friends with them in a couple of year's time when something goes wrong.