While most couples mark their undying love for one another with an engagement ring, more and more are beginning to enter the housing market for something with bigger asset – a brand new home.
Rising rental costs, low-rate mortgages, first home owner grant, new communities and the ability to deduct mortgage interest from income taxes all make being a homeowner a more attractive option for serious couples.
If you’re looking for a good first home investment, you’ll be pleased to know that Lendlease housing communities in Epping North, particularly in the thriving Aurora community, Aurora combines the benefits of an affordable property in a blooming neighborhood with easy access to transportation to and from Sydney CBD.
Some financial advisers may advise against it because buying a home is often the biggest and most financially complicated move couples can make, and unwinding it can be very hard for unmarried partners if the relationship ends. This is why it’s important to think long and hard before you commit.
Now if you still want to go with it, here are a couple of tips to get you started:
Assess and compare credit scores. As partners, you probably already have shared details regarding your income and savings when determining if you can afford a home or not. Another piece of information you’ll need to assess in advance of closing is credit report.
A home purchase is essentially a business deal between unmarried couples, so they have to know the creditworthiness of their partner. Credit scores will impact the ability to get a mortgage and the interest rate both of you will pay.
Get a joint account. It’s also advisable to set up a joint bank account if you don’t already have one. This can be used to pay the mortgage, insurance, property taxes, as well as maintenance. Both of you can set up automatic monthly deposits into the account from your individual accounts so that you can’t forget it. To simplify bill-paying and budget tracking, you can have the home expenses automatically deducted from the account each month.
Cost management. Cosigning on a mortgage means being fully liable for the debt, meaning that if the relationship went wrong and one stops paying, you need to assume the entire obligation. The best course of action here is to get a mortgage that you can pay on one income. This also comes in handy in the event of unexpected financial need such as for injury, illness, and accidents.
Setting up the agreement. Get a real estate lawyer to prepare this step for you. The lawyer will create a written document, such as a partnership, property or cohabitation agreement that will clearly outline the full details of the arrangement. It’s important to iron out all details in advance to remove any emotions or doubt if things turn out badly.
The title of the property. You should decide as a couple how you will own the home or take the title. You may choose to be joint tenants, as tenants in common, or you can even have one person hold the title as sole owner. It depends upon the arrangement you want and is comfortable with as partners.
It’s vital that you and your partner go through with this with commitment and careful planning. You need a complete picture of each other’s finances and a contract that outlines your desires for the property and its future. Best of luck!