Co-purchasing your first home
If you’re struggling to get into your first home as a solo buyer, another option is to pool your resources with someone else and buy together as co-buyers. It could turbo-charge your buying power.
Rustling up some extra cash with a co-buyer may give you access to a wider choice of properties or a better quality home or location. Having a bigger deposit also has the potential to see you save on lenders mortgage insurance. Co-buying can mean it takes less time to raise a deposit, so you could potentially get into a home of your own sooner.
And with the benefit of a bigger kitty of funds, co-purchasing your first home may also make it easier to meet the ongoing costs of home ownership including maintenance and repairs.
Buying with family and friends
Buying a home is a major step, and it is important to choose your co-buyer(s) with care. Friends and family or even a partner, are likely to be your main choices. It’s worth noting that if any of your co-buyers have owned property before, you won’t normally be eligible for the first home owner grant or savings on stamp duty. This makes it worth crunching the numbers.
The key to successful co-purchasing is to have a strong and trusting relationship with your co-buyer. Don’t just assume it will all be smooth sailing though. A sensible precaution is to draw up a legally binding contract, or co-purchase agreement.
This contract can cover a wide range of situations from how you will share costs, through to what happens if one co-owner wants to bail out of the arrangement. Having your co-buying agreement reviewed by your solicitor will help to ensure that you’ve got all your bases covered.
Property share/co-ownership loans
The next step in co-purchasing your first
Some lenders specifically cater for co-buying with “property share” home loans, which let you split the cost of buying a home with family and friends, while still having control of your finances.
Or you may prefer to split a regular mortgage so that each buyer can manage their portion of the loan. Your Aussie Broker can explain the loan options available in your circumstances.
Joint tenants vs tenants in common
Deciding how you will hold, or own, the home you are co-buying matters too. Joint tenancy and tenancy in common are the two main types of property ownership.
Under a joint
Your solicitor can offer advice on the type of ownership structure suited to your situation.
Death of a property owner
By contrast, if you own the property as tenants in common, each owner can leave their share of the property to whoever they choose.
First home buyer's guide for couples
A handy resource if you’re thinking of buying your first home with a co-purchaser is Aussie’s First Home Buyer’s Guide. It covers all the steps of buying your first place including how to navigate co-ownership.
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- Chapter One : Getting started
- Chapter Two : Your Dream Home
- Chapter Three : Money Matters
- Chapter Four : Ways to Purchase
- Chapter Five : Understanding Interest Rates
- Chapter Six : Understanding Home Loans
- Chapter Seven : Lending Sources
- Chapter Eight : Getting Your loan
- Chapter Nine : Choosing a Home
- Chapter Ten : Steps to Settlement