Buying a home is probably the biggest investment you will ever make with your partner. It's a huge financial decision that requires a lot of research, commitment, planning, and budgeting. While there are advantages, there are still some things you should do before making this big financial commitment, such as:
Know how much you will share ownership
Mortgage repayments , stamp duty, insurance, repairs and maintenance are some of the costs you and your partner will split. Understand how much money each of you will share. There are two options available for buying from a property:
- Joint tenants with the right of survivorship. This is the same as the entire property. A joint tenancy can be broken when one of the tenants passes away, this is called the "law of survivorship". Hence, the ownership of the property will automatically be given to the surviving one.
- Tenants in common. This means both of you own and share of the property. Shares can be of unequal sizes, but owners have the right to occupy and use the entire property. The ownership can be passed to the chosen beneficiary of the owner.
Know each other's credit history
You need to be financially honest with each other. Even if you are applying for a home loan together, lenders see you as individuals not as a single unit. By knowing each other's credit history you can improve your possibilities of getting a mortgage approval.
Get a joint mortgage
When you buy a home mortgage with your partner you can get a mortgage. You will be accountable for making the mortgage repayments. You and your partner can decide how you will share the equity in the property. But keep in mind that your credit scores will be linked to each other and future lenders will be able to see.
Compare home loans
This is the best strategy for getting the best home loan for you and your partner. Compare interest rates, fees and features . Get the type of home loan that will fit your current financial situation.
Put it in writing
Your situation with your partner can change in the future. It's best to contact a lawyer to get you a written agreement that clearly indicates the complete details of you and your partner's agreement, such as property ownership, the equity in the property partner, how to split the income and costs, the mortgage repayments. and many more.
Buying a home with your partner can truly bring you closer together. You have researched home loans together, put together the right documents, and each of you know each other's rights and responsibilities.