Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
Buying property with friends
Buying a property with a friend can be a good option to get yourself onto the property ladder because of its affordability. You have someone to share the upfront and ongoing cost of owning a house. You and your friend can split the utility bills, the maintenance costs, the home loan repayments, and so much more.
While the benefits of buying a property with a friend sound appealing, there are also some disadvantages involved such as the risk of your friend defaulting on the loan.
To make sure you can avoid potential problems down the track, we have listed the top things you need to consider when buying a house with a friend. Here they are:
Obviously, you want to buy with someone who you’ve been friends with for a long time, who you trust, and who you are very close to. It will be difficult to live with someone who you barely know. Additionally, you and your friends should be open about your finances.
The location, amenities, number of rooms and bathrooms are just some of the things you should discuss with your friends regarding the house. It’s important that you are in agreement when buying about the type of house or investment property.
Even though you have someone to share the loan repayments with, it’s still necessary to get a home loan package that is suitable. Interest rates should not be your only concern. You should also check what features the loan has such as an offset sub-account, split loan facility, and more.
You and your friends will need to consider the kind of property ownership. Typically, there are two types:
When buying a property with friends, it’s important that everything is clearly discussed and legally documented. You can consult with a solicitor to put everything into writing to avoid any disputes. This should include the complete details of your agreement such as the type of co-ownership, splitting the mortgage repayments and other monthly expenses.
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