Purchasing with Parents Most Popular
An online survey by Loan Market which asked home loan consumers ‘Who would you be most likely to buy a property with?’ found that 45 per cent of 716 respondents said they would prefer to buy property with a parent.
The survey found that Gen-Y buyers were more likely to purchase with a partner of less than a year and that purchasing with a friend was least likely option for all respondents.
Loan Market Insights Manager Paul Smith said that homeowners who purchase property with their parents have several advantages over other applicants who purchase alone or with another party.
“For many buyers, the most trustworthy and financially secure people to partner with on a property purchase, are their parents. Parents can have the experience of buying and selling property through many different markets and will often have equity that makes the purchase more affordable,” he said.
Mr Smith said some buyers that used their parents are guarantors could borrow up to 100 per cent of the property price or could use their parents money as a deposit so they could avoid costs such as Lenders Mortgage Insurance, which is charged for buyers that borrower more than 80 per cent of a property.
The survey results found that 31 per cent of Gen-Y respondents favoured purchasing with a partner of less than a year, which was six per cent higher than all other respondents.
“Banks and lenders all have varying criteria for joint home-loan applications and purchasing with a partner that requires lots of planning and consideration so that things go smoothly. Costs for renovations and maintenance as well as value fluctuations should be discussed and splits agreed upon before entering a contract,” he said.
Who would you be most likely to buy a property with?
Gen Y All
a) a partner of less than a year 31% 25%
b) a sibling 12% 19%
c) a parent 48% 45%
d) a friend 9% 11%