{"id":4539,"date":"2017-05-07T23:10:27","date_gmt":"2017-05-07T23:10:27","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/what-to-know-before-getting-a-mortgage-with-friends\/"},"modified":"2017-05-07T23:10:27","modified_gmt":"2017-05-07T23:10:27","slug":"what-to-know-before-getting-a-mortgage-with-friends","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/what-to-know-before-getting-a-mortgage-with-friends\/","title":{"rendered":"What to know before getting a mortgage with friends"},"content":{"rendered":"

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\"couple<\/p>\n

Make sure you discuss the property purchase in detail and where possible draw up a written agreement. Picture: Getty<\/p>\n<\/div>\n

Buying property with friends is the \u201cnew normal\u201d across Australia and like any other partnership, communication and transparency are the keys to success.<\/strong><\/p>\n

John Tindall, a Choice Home Loans<\/a> mortgage<\/a> broker in Wattle Grove, Sydney, says while buying solo, sometimes with a little help from parents, remains \u201cfar and away\u201d the most popular option, sometimes it\u2019s simply not possible.<\/p>\n

\u201cProperty prices in some cities are exceeding the ability of many people \u2013 either as a single person or a single couple.<\/p>\n

\u201cIn this case, joining forces with another person or couple can mean the difference between getting the property and missing out,\u201d Tindall says.<\/p>\n

The broker explains what potential friends-turned-property-partners need to know.<\/p>\n

Be aware of the risks<\/h2>\n

\u201cThe primary risk of getting a \u2018normal\u2019 mortgage with friends is that all parties are mutually responsible for paying off the loan. So, if somebody has an income \u2018hiccup\u2019, like an accident or unemployment, then the other party still has to pay the mortgage.<\/p>\n

\u201cThere are products where this responsibility can be separated out, such as the Commonwealth Bank\u2019s \u2018property share\u2019 product, but the whole property is usually still on the hook. In other words, if the bank has to sell because one party has defaulted, it\u2019s possible the entire property could be sold, even if the other party doesn\u2019t want to sell,\u201d\u00a0Tindall says.<\/span><\/p>\n

This information is of a general nature and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.<\/i><\/span><\/strong><\/h6>\n

Other risks are arguments and accidents. Who chooses who can live in the property? Who gets to use the garage? How are repair bills split?<\/p>\n

\u201cOne approach is to have a written agreement that addresses these issues, but arguments will still happen. Again, if one party has an accident that stops them from working for a period of time, who pays the mortgage and the other bills?\u201d<\/p>\n

How can buyers make sharing a mortgage work?<\/h2>\n

Choosing the most suitable mortgage type \u2013 one which preferably makes each party responsible for their own repayments, such as a tenants-in-common structure \u2013 is a good start, Tindall says.<\/p>\n

\u201cIf you own property as joint tenants, on the death of one person, the property and debt passes to the other. This is despite what your Will says, assuming you have one. So you need tenants-in-common, otherwise you could unintentionally be giving your housemate half of your property,\u201d he says.<\/p>\n

A tenants-in-common structure also allows people to hold different proportions of ownership, for example 60% for one party and 40% for the other, depending on their initial and ongoing contributions.<\/p>\n

Next, look at a co-ownership agreement which addresses things like repairs and a future exit strategy, preferably written down and signed.<\/p>\n

\u201cIt can be done by a lawyer, but it won\u2019t cover all possible issues, so a less formal agreement could work, particularly if both parties agree to consult an independent third party should major issues arise. Appropriate insurances are an important, but often overlooked, precaution,\u201d Tindall says.<\/p>\n

This information is of a general nature and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.<\/i><\/span><\/strong><\/h6>\n

\n <\/p><\/div>\n

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Realestate.com.au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

[ad_1] Make sure you discuss the property purchase in detail and where possible draw up a … What to know before getting a mortgage with friends<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":4540,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[1403,15239,347,617,698,1329,408,1007,41,818,15282,907,3053],"class_list":["post-4539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-buy","tag-chase","tag-home-loan","tag-house","tag-insurance","tag-loan","tag-mortgage","tag-owners","tag-property","tag-real","tag-ross","tag-tenant","tag-tenants"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/05\/1494723330_GettyImages-511389345_sm-1024x768.jpg?fit=1024%2C768&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":623,"url":"https:\/\/amazingproperty.com.ng\/blog\/mortgage-broker-versus-mortgage-lender-which-one-is-right-for-you\/","url_meta":{"origin":4539,"position":0},"title":"Mortgage Broker Versus Mortgage Lender: Which One Is Right for You?","author":"Amazing Property","date":"November 3, 2016","format":false,"excerpt":"Top real Estate Blogs in Nigeria : Mortgage Broker Versus Mortgage Lender: Which One Is Right for You? 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