Co-Buying: An Affordable Way to Own Property or Your Home

With the global crisis still on the go, most people are finding it difficult to acquire and buy property they would call their own. The problems that you have to deal with always concern money, and at this time, you may think you may not have enough of it. Luckily, there is now a good and affordable way to own property. It is called co-buying, and you have to do this with another person who can be a friend or any member of your family.

Co-buying is an affordable method that has been given good consideration by lenders to people who can’t afford to buy property on their own due to lack of financial means. It is an accepted trend that is gaining some ground in the total lending industry. As co-buyers, you pool your finances together so you can borrow money to buy the property you both want. This is a good tactic to convince the bank or other lenders that you have enough resources to acquire property. It is just reasonable for lenders or the banks to see proofs of your deposits or financial capability to buy property and continue the mortgage payments thereafter. This also encouraged those into co-buying to take advantage of the first home owners grant (FHOG) offered by lenders for sometime now, but then FHOG is expecting cut-offs this December.

Before going into co-buying property, there are important considerations to remember. First, you must have a binding contract with your co-buyers. This is an important factor to make it work. Next, remember that both of you must seek private legal assistance to plan out what important details you want to be in your contract. You must agree on issues like insurance, upkeep and care, repairs, renewal and maintenance of the property. Include other similar details you may have in mind like what happens if any of you would get sick, move out , have job transfers abroad or go for a long vacation. You must agree on all the terms of the contract and have proper records and supporting documents as proofs of your agreements. The Commonwealth Bank proposes a Property Share Loan agreement to co-own. This can be compared to like two individual loans, but if one individual fails to pay up, both of you are still legally responsible, and you are liable to shoulder the whole amount if your co-owner is not able to do so. So it would be an advantage for you to choose someone whom you can really trust. It is also essential to make issues clear between you so both of you won’t be sorry later on.

Co-buying is good only when you know what you are getting into. The emphasis is always starting with a good contract with all the details you want to be included in it, proper legal advice for the both of you and the mutual agreement between you as co-buyers that you would be binded with your contract for as long as the contract lasts. If you are still in a quandary about what co-buying is about, think of it as a marriage with a pre-nuptial agreement. Try to imagine the most horrible situation that can happen and be prepared to handle it just in case it does happen to you.

Note: Some Information about FHOG and those into co-buying:

For two people who are not related to each other (not a spouse or partner) and are buying their first home together to augment their borrowing capability and apply for the FHOG, only one will receive the funds. There are different funding for co-buyers buying a new house or property and buying an already existing one. The buying of a new property is higher. But then, for this month there have already been cutoffs in the funds.