Benefits of Buying a Home with Your Partner
So, you have decided to take the plunge and buy a house together. Buying a property can be very expensive. So, for many first-time buyers, the obvious option is to buy with a partner.
Sharing the financial burden with a partner also increases the chances of being approved for a bond and, in some cases, also increases the maximum you can apply for.
If you and your partner plan carefully, you can also increase the deposit and get on the property ladder. But, remember, if one party defaults, you might be held liable.
While all parties share in the benefits, they also share in any financial penalties that may come about because of late or skipped payments on the home loan. Here is a look at some of the benefits that come with buying property with your partner.
Through sharing the deposit and bond repayments, those who are unable to show the necessary affordability on their own, can still take advantage of the current buyer’s market by investing with a trusted partner.
Increased Loan Eligibility
When you apply for a home loan, banks use the net monthly salary to calculate how much you can afford. If you want a bigger loan, applying with a partner is one way to increase the value you are eligible for. It’s important that you are open with your co-buyer, though. If either of you have got a bad credit record, be upfront from the start.
Not only do you have increased loan eligibility but joint ownership eases the repayment process too. As co-owners you can strategise on how you want payments to be made. You can split it evenly or have one party pay the loan. Be sure to get the terms of the loan in writing.
Joint ownership enables easy transfer of a house or land among spouses, as they can nominate their children as future owners of the property.
What to Look Out for With Joint Property Ownership
Buying jointly can delay the processing of official documentation, though. Sometimes, joint loans take longer to process because there is more admin required. It is important to ensure that all your documents submitted are authentic and up to date.
Joint ownership could also have an impact on your credit history. As joint home loans provide enough flexibility to decide if one or both the owners would repay the loan, note that in case of any default payment, credit history of all the applicants will be tainted.
Depending on who you choose to be your partner in the joint buying process, remember, there is a lot to consider. If, for example, you buy with a friend, you’ll have to think about how you might adapt to having a housemate around all the time.
While market conditions may be challenging for buyers, through sharing the deposit and bond repayments, those who are unable to show the necessary affordability on their own can still get their foot in the door by buying with a reliable partner.