Investing together part 2: Buying property with a partner
Love and money are two strong forces that may not always exist in favour of one another. In no situation do they work closer than when buying a home – a commitment almost on par with saying the words ‘I do’.
While shouldering the financial burden together will certainly make buying a home easier, difficulties and challenges may present themselves. We take a close look at buying property with your significant other to help make sure that your property aspirations and your relationships align and flourish.
Get on the same page and make it official.
The first thing you should do when buying property with your partner is to make sure that you’re both on the same page. You must agree on what you need out of your purchase, where (and what) you want to purchase and how you will manage your finances when you do.
Buying a home together should strengthen your relationship – not damage it.
Reaching a completely transparent and honest agreement before the fact will make the entire process easier down the road. After you’ve agreed on the details it’s time to make it official.
Signing a legal document to create a binding mutual agreement makes the entire process more transparent, safe and straightforward for all. This agreement will cover everything from who pays the bills to who can live in the house and even how either party can sell its share. Hiring a legal representative to help you and your partner draw up this document will make sure that it’s airtight and covers all the bases.
Joint tenants or tenants-in-common?
Deciding between these two is one of the most important considerations when financing and buying a home together.
Joint tenancy means that you both own the entire home together, and that if one partner passes the other receives whole ownership of the property. This is an option often chosen by married couples – but may not be ideal for new relationships as it can be difficult to divide and sell a share of the property in the event of a break-up.
Tenants in common on the other hand means that you and your partner separately own an agreed upon percentage of the house. When financing a home in this agreement you may be able to limit your liability if anything goes wrong.
An experienced mortgage broker can help make this a straightforward process by advising you and talking through all of your options. We can help make sure your co-purchase strengthens your relationship, instead of causing unnecessary drama!
