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Buying a property with someone other than your spouse?

Oktay Sengoz

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25/10/2022

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1 min read

It’s usually a great idea at the time, and many siblings or family members consider joining their savings to buy a property together. The double income and the combined savings usually allow you to buy a bigger and better property, which may mean that you make more gains in the future, compared to the property you could afford with only half the savings.

Before you decide to buy a property with a family member other than your spouse, here are the things you should consider

You are both liable for the full loan

There is a preconceived idea that if you split the loan in half that you are only liable for your split of the loan or half the loan. This is not true, each applicant is 100% liable for the loan. If one member stops making payments, then the whole loan is in default.

Having a joint loan impacts future borrowing

The whole loan will be taken into consideration when assessing your ability to repay a loan, even though the loan may be in joint names. Better still, the lender will only take half the rental income into consideration if the property is an investment property. We would strongly suggest that if you are looking to buy another property in the future on your own or with your spouse, then you should run the calculations to see how the joint purchase could impact your future borrowing.

Have an exit strategy

It's best to have an exit strategy before you commit to a property with a family member. Both parties should be aware of the other persons goals and if things change, then what are the options to sell the property. When family members are not clear, this is where things could turn nasty.

Talk to us today to find out how purchasing a property with a family member could impact your future borrowings.

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