Lower Your Deposit and Buy With Family or Friends
For those looking to buy a property but cant seem to get in the market as 1. you dont think you can afford it or 2. you dont have the right amount of deposit, then it’s time to look outside the box. There are several options to help you get into your own home sooner and we can talk you through them. One option is to pool funds and join forces and considering buying a property with family or friends.
Purchasing property with family or friends is usually set up as a tenants-in-common purchase, which lets two or more people own an interest in a property. This set-up means that you’re all responsible for your portion of the debt and all jointly and individually liable for the combined debts. Each individual can choose the structure for their portion of the loan to suit, eg. having fixed or variable, making extra repayments and having their own redraw.
Making property more affordable is the biggest advantage of purchasing as tenants-in-common. It allows you to:
- Share the property purchase price and fees
- Share ongoing costs like home loan repayments, maintenance and upkeep and property management fees
If you’re a first home buyer, you may still be eligible for the First Home Owners Grant (FHOG) – we can check your eligibility. Generally, all people purchasing the property will need to be eligible for the FHOG, however only one grant will be issued per property.
There are many factors we’ll talk through if you want to purchase with family or friends. There are also some things you should consider such as the impact property finance could have on your relationship. If one person is having a difficult financial time everyone is impacted as all are liable for the mortgage repayments. You’ll need to be very clear on the expectations and possible scenarios and talk about how you want to manage any issues that pop up.
It’s smart to enter into a Co-Ownership Agreement which you will need a lawyer to assist you with. Among other things, a Co-Ownership Agreement sets out the terms of on-selling shares (or your ownership right) in the property, the proportion of ownership and liability for costs such as the mortgage, maintenance and upkeep. You should talk to a solicitor to make sure your legal rights are protected.
If you want to know more about purchasing property with family or friends, or any other home finance options that may suit you get in touch and Nathan Sitas can complete a no obligation assessment of your current situation.