Buying a House with a Partner: What You Need to Know Before You Do It
Buying a house is a huge milestone for many couples. It signifies a step forward in your commitment and can be an exciting time. But before you jump online to search for properties and start visiting open homes together, there are some crucial things to consider, especially when it comes to finances and applying for a joint home loan.
This also applies to those planning to buy a house with a family member or friend (something that has become increasingly popular since the Australian Government expanded the criteria for its First Home Guarantee).
This blog will explore the key points you and your home-buying partner need to be on the same page about before embarking on your house-buying journey. We’ll also explain how a mortgage broker can be your secret weapon for securing the best possible home loan for your situation.
The Importance of Communication: Finances and Expectations
Open communication is vital throughout the process of buying a house, but especially when it comes to finances. Here are some key areas to discuss with your partner before you consider a home loan together.
- Credit Scores and Debts: Be upfront about your credit scores and any existing debts. A mortgage broker can help you understand how to improve your creditworthiness as a team if needed.
- Deposit and Budget: Discuss how much you can each comfortably contribute towards a deposit and agree on a realistic budget for your monthly mortgage repayments, property taxes and homeowners insurance. You can use our online calculators for this.
- Financial Goals and Timeline: Are you planning on having children soon? Do you plan to live in this house for a long time? Understanding your long-term goals will help you choose a property and mortgage that aligns with your future plans.
Considering Buying with a Friend or Family Member?
While buying a house with a romantic partner is common, some people choose to venture into homeownership with a close friend or family member. This can be a great way to pool resources and make homeownership a reality sooner. However, there are some additional considerations to keep in mind:
- Formalise the Agreement: Having a clearly written co-ownership agreement that outlines ownership percentages, financial responsibilities, exit strategies (if one person wants to sell) and dispute resolution processes is crucial.
- Choose the Right Ownership Structure: Joint tenancy or tenants in common? Understanding the difference in ownership rights and inheritance implications is important. A lawyer can advise you on the best structure for your situation.
- Honesty About Expectations: Discuss lifestyle expectations, maintenance responsibilities and potential future changes in life circumstances (marriage, children, etc.) that could impact the living situation.
Benefits of Using a Mortgage Broker When Buying a House
A mortgage broker can be an invaluable asset when buying a house with any partner. Here’s how they can help:
- Finding the Right Loan: Mortgage brokers have access to a wide range of lenders and loan products. They can assess your financial situation (including both individuals) and recommend a loan option with the most competitive interest rate and terms that fit your specific needs as co-owners.
- Streamlining the Application Process: Navigating mortgage applications can be complex. A broker will handle the paperwork, negotiate with lenders on your behalf and ensure a smooth application process, considering the financial profiles of both applicants.
- Expert Guidance: They can guide you through the intricacies of joint home loan applications, explain different ownership structures and answer any questions you may have throughout the process.
Taking the Next Step: Schedule Your Free Consultation Today!
Buying a house with a partner is an exciting time but it’s important to be well-prepared. By having open communication about finances, expectations and having the expertise of a mortgage broker by your side, you can navigate the process with confidence.
Ready to discuss your home ownership goals? Schedule a free, no-obligation appointment with one of our expert mortgage brokers today!
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
