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If you’re buying a home with your partner – congratulations! It’s a big commitment and an exciting journey. But there are several things you should prepare to have a good and honest experience.
This is because there are so many things to consider such as affordability, which can often be a stumbling block. But if are in it together and take on an equal share of the responsibility, there are many benefits.
“There are many advantages to co-ownership, among them that it enables younger people to purchase property and get a foot on the property ladder earlier than they might have on their own,” says Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg.
Here we unpack the main things to do and bear in mind when buying a home with your partner to ensure it’s a smooth, hassle-free experience.
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1. Be patient
You may want to start the home buying process straight away if you’d decided to buy together. But this may not always be the best course of action.
“The first step to easing the financial burden of buying a home is to be patient and save as much of a deposit as you can as this will not only help you in the short term by making it easier to secure a loan, but it will also be a blessing down the line as smaller monthly repayments mean more money in your budget for other important things.
This will also give you time to get your credit rating in order and even to improve your credit score.
Remember that the better your risk profile, the higher your chances of getting a competitive interest rate so make sure that all your accounts are up to date and serviced regularly and address any issues there may be before applying for a home loan,” says Odendaal.
2. Increase your chance of success
If you buy a home, prepare all the necessary paperwork. Also do the legwork on your credit health.
“The pooling together of joint buyers’ income to improve affordability, having a sizeable deposit along with good credit scores will significantly increase their chances of success and of securing home loan finance at an attractive interest rate,” says Odendaal.
3. Decide upfront who owns what
You can each own an equal share of the property and be jointly liable for the bond. But you don’t have to choose this option.
Odendaal says: “It’s possible for the owners to enter into an agreement whereby each party acquires different shares of the property, for instance one owns 70% and the other 30%, and this information must be recorded in the title deeds of the property.”
While it may not be a romantic thing to do, make sure it’s all in writing. Odendaal adds: “Although this form of ownership has many compelling advantages, it must be borne in mind that there will almost certainly come a day when the property will be sold, possibly not always under positive circumstances.
“And, regardless of the circumstances, it will be much more difficult without an existing agreement in place – and creating one retrospectively is not an easy task.”
4. Be honest about debt
This may be one of the hardest things to do but if you have any pre-existing debt or bad debts it’s best to come clean before it scuppers any major house-buying plans or dreams.
“If your debts are with registered credit providers, the banks will pick up the details. Being honest to yourself about your affordability is key, because the instalments will become due and payable, and you, the consumer will ultimately bear the brunt,” says Gary Phelps, senior broker at Icon Property Group.
If you are unsure about your financial commitments, visit transunionitc.co.za and obtain a free annual credit report on your ID number.
5. Have a look at the total costs
Buying a home is expensive. The key is not only to look at the cost of the home but to consider all the other associated costs, which can all add up.
Consider things like rates, water and sewerage and refuse removal costs as well as life cover for the home loan, upcoming repairs, and maintenance in the next 12 months. If you’re buying a home further away from the city, remember to factor in the extra commuting costs.
