Buying your own home is one of the most exciting and significant big moments in your life. It’s a place where you can put down your roots, decorate how you wish, and it’s a place you and your partner can escape to and enjoy.
There are a few things that you really need to consider when purchasing your first house with your partner because, let’s face it, this is most likely going to be the biggest financial investment you will make, and you really want to get it right.
Here are four pieces of advice:
1. The perfect property
In deciding which is the right property for you, think of where you would like to be in five or 10 years.
If having a family is important to you this will influence where you live, and you need to consider whether the property has enough outdoor space, if it’s close to schools, sporting activities, shopping centres and public transport. Also ask: does the property suit a family, how many bedrooms would be suitable, is there room to extend as your family grows?
Alternatively, having children may not be part of your plan and you may favour the inner city, a beach lifestyle, or being close to work may be of paramount priority.
Write a wish list with all the things that are important to you in purchasing your property, and then highlight the things that are non-negotiables.
2. Ownership of the property
It’s important to take the time to get appropriate advice in respect to how you are registered as owning the property.
It may be that you and your partner contributed equally to the deposit and intend to contribute equally to the mortgage repayments. In this case, you may determine to be registered as tenants in common in equal shares or joint tenants.
However, if you contributed a $200,000 deposit towards a million-dollar property and your partner contributed $100,000, then ownership could be split 55/45 per cent and you can be registered as tenants in common in this manner.
The significant difference between tenants in common and joint tenants is what happens to your equity in the property upon your death. If you own the property as tenants in common, you may make provision in your Will for what happens to your equity upon your death. If the property is owned as joint tenants, the property is deemed a joint asset and would automatically pass to your partner upon your death.
Big Moments by Melisa Sloan.
3. Transparency with finances
Buying a property is a big commitment so you need to ensure that you and your partner are on the same page from a financial perspective.
If your finances aren’t in alignment now it may cause problems in the future, so it’s important to have those important conversations prior to committing to purchase a property together.
You need to be mindful that if you are both listed on the mortgage that you are both liable for the payment of this loan. If your partner was to lose their job and found themselves in financial difficulties, you will still be liable to ensure that the loan is paid.
While we are on the topic of transparency and finances, it would be prudent for you and your partner to put in place a Binding Financial Agreement, to protect your interests in this property together with your other assets, in the event of a separation or breakdown of the relationship.
4. Surround yourself with a strong team
Having the right team to support you and your partner navigate your journey of purchasing your first house is paramount.
Your team may comprise of a mortgage broker, buyer’s advocate, lawyer, financial planner and accountant. Use their skills and expertise, and seek their advice so that you can make the best decisions relevant your property purchase. Your lawyer will be able to review the contract of sale for the property and alert you to any red flags.
They will also be able to advise you of any potential concessions and grants that you may be eligible for, such as the First Home Buyers Grant in your region. Your mortgage broker will be able to give you some good insights into borrowing capacity and servicing of the loans.
Buying a property with your partner can be the start of a wonderful new chapter, however you really need to ensure that you take the time to do it properly, do the research, ask for help and surround yourself with those that can help you along the away. Once settlement takes place, sit back and enjoy, as from new beginnings great things are born.
