HOUSE CO-OWNERSHIP: How To Get Into Your Own Home Sooner With Friends or Family.

Are you struggling to save enough for a deposit on your first home? Do you find it challenging to meet the affordability criteria? If so, house co-ownership might be the solution you’ve been looking for.

House co-ownership recognises the difficulties faced by homebuyers and offers an alternative approach to getting on the property ladder.

In this article, I’ll walk you through the steps of co-owning a home, providing you with the information and resources you need to make an informed decision.

Understanding House Co-Ownership

Co-ownership is a different way to get into a home by teaming up with friends or family members.

It offers an opportunity to make home ownership more affordable and attainable, especially for those who find saving for a deposit challenging.

By pooling resources, co-ownership allows you to share the costs and responsibilities of buying a property, making it an attractive option for many first home buyers.

Who Can Co-Own?

Co-ownership is a flexible arrangement that can look different for everyone.

You can choose to co-own a property with a group of friends, siblings, or even as a couple teaming up with another couple.

However, it’s important to note that co-ownership comes with certain risks and challenges. Before proceeding, it’s essential to know and trust the people you’ll be co-owning with.

Setting Clear Expectations

Before embarking on a co-owning journey, it’s best to have open and honest conversations with your potential co-owners.

Discuss your long-term goals, reasons for purchasing the property together and each person’s contribution towards the deposit. It’s also essential to consider possible scenarios that could arise, such as financial hardships or major property maintenance issues.

Taking the time to work through these details will help ensure that everyone is on the same page and minimise potential conflicts in the future.

Budgeting and Deposit Amounts for House Co-Ownership

To determine the budget for your co-owned property, it’s important to work out your finances collectively.

Calculate the combined deposit amount and consider the purchase price of the property. Generally, a combined deposit of 20% of the purchase price is required if at least one co-owner will be living in the property.

Planning and budgeting early on will help you understand your financial commitments and make informed decisions.

Get in Touch with the Professionals

Before diving into the co-owning process, it’s essential to seek professional advice.

As a group, it’s best to consult with your Mortgage Adviser who can guide you through the application process and help you understand the financial implications of co-ownership.

Additionally, getting a lawyer involved for each party will help you to fully understand the legal aspects and risks associated with co-owning a property.

House Hunting and Making an Offer

Once you’ve established a clear understanding among your co-owners, it’s time to start house hunting.

This part can be exciting yet challenging when trying to find a property that suits everyone’s needs. Make sure to discuss your preferences, priorities and budget constraints upfront so you have a clear goal in mind.

When you’ve found a potential property, share it with your Mortgage Adviser to confirm the loan amount and discuss any conditions that need to be met before making an offer.

Legal Considerations and a Property Sharing Agreement

Co-owning a property requires careful attention to legal considerations. An independent lawyer can provide you with the necessary legal advice and assist in drafting a property sharing agreement.

This agreement outlines the details of your co-ownership arrangement, including responsibilities, ownership percentages, financial obligations and dispute resolution processes.

Setting Up the Home Loan – House Co-Ownership

Once you’ve found the perfect property and have a clear understanding of the legal aspects, it’s time to set up your home loan.

Your Mortgage Adviser will help you to determine the best loan structure for your co-ownership arrangement. Things like how to split the loan, repayment terms, payment frequency and of course your home insurance needs.

It’s important to remember that all co-owners are jointly and individually liable for the entire home loan.

Co-owning a home offers a unique opportunity for home buyers to overcome the challenges of saving for a deposit and meeting affordability criteria.

By teaming up with friends or family members, you can pool your resources and share the responsibilities of homeownership.

However, co-ownership comes with its own set of considerations and risks. It’s important to have open and honest conversations, seek professional advice, establish clear expectations and legal agreements before embarking on a co-owning journey.

With careful planning and collaboration, co-owning a home can be a viable and rewarding path to achieving homeownership.

Reach out if you need a hand!

Applications for finance are subject to meeting the lenders criteria, terms, and conditions. Refer to our website www.hbmi.co.nz for our Public Disclosure Document.