19 Feb 2013
A Property24 reader asks:
I would like find out about how to get a joint bond with my partner when we are not married?
Investing in property is usually the biggest financial commitment that any individual will make. Increasingly, people are looking to purchase a home with a friend, sibling or partner to halve the costs and increase the likelihood of bond approval.
Because the individual burden of bond repayments is halved, obviously the requirements of each partner are lessened. This is called joint affordability – simply put, you each only have to be able to afford half the house. Nonetheless, both partners will be individually assessed; they will need to provide proof of income and have their credit record checked.
As with any other big commitment, buying a property with someone else is not a decision that should be taken lightly. The partners need to have worked out all the ins and outs of the process before putting pen to offer.
Both parties should sit down for a serious discussion before the potential property has been identified and the excitement could cloud judgment, and consider what will happen to the property in various different scenarios, for instance if one partner wants to leave or in the unfortunate event that one partner dies.
The decisions should be made, and then, once the home is purchased, committed to paper – either a contract between the two partners or a will drawn up by a lawyer. Unfortunately, the one thing that co-ownership won't save the partners is paperwork.
Both parties should be willing to disclose any financial issues that might affect the partnership, as they will naturally have to be independently subject to all the same financial assessments by the bank as individual buyers.
The partners who have bought a property together should then either ensure that the costs of buying and maintaining the property are equally shared. If this is not possible, then it is important to keep careful track of both parties' expenses in relation to the property so that the proceeds can be split fairly when the property is sold.
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Jenny RushinJenny Rushin is the Provincial Sales Manager at ooba, South Africa’s biggest bond originator, and is an expert in home finance.
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