Purchasing a property is a big financial move with many elements affecting the process. If you’re entering into a joint ownership situation, it can be even more complex.
By understanding how mortgage brokers work to facilitate joint property ownership, you can develop a clearer sense of your rights and obligations. This can help you take control of your home buying journey and approach co-ownership with confidence.
Wondering what joint property ownership really means and how your broker will help to make it work? Here’s everything you need to know.
What is joint ownership?
Joint property ownership is what happens when two or more people combine their finances to pay a deposit and take out a loan in order to purchase a property.
Co-ownership is common in marriage and de-facto relationships, but it can also occur in other situations. Some buyers explore joint ownership options with friends or family members.
Generally speaking, all parties in a joint ownership agreement will hold the property as ‘Tenants in Common.’ This means that each party will hold a percentage of the property’s equity, based on how much each party has invested in the purchase.
Joint property ownership can be a great way to break into the housing market. However, it can also be both emotionally and financially complicated. This is why it’s important to consider the pros and cons.
Advantages and disadvantages
Joint ownership offers many advantages for property buyers! This arrangement allows you to share the cost of purchasing and maintaining a property with someone else. Ultimately, this can mean you have a larger budget that allows you explore more market options.
Engaging in a joint ownership arrangement may also allow you to pay off your mortgage more quickly, as more people will be making repayments. If you’re secure in your arrangement, this is the path to financial freedom!
On the flipside, joint property ownership also has a few disadvantages that you should be aware of before choosing this pathway. Parties are usually jointly liable for debts associated with the property. If one person defaults on payments, it will be up to the remaining parties to pay the difference.
Setting up a co-ownership agreement may also mean incurring additional costs from the outset, and you’ll have multiple opinions and situations to consider if you ever want to renovate or sell. It’s also important to be secure in your relationship with your co-owners, as relationship break downs will affect your housing situation.
Your broker’s process
A skilled mortgage broker can help you enjoy the benefits of joint property ownership while avoiding the common pitfalls.
Your broker will work with you to gain a clear understanding of your goals, needs, and situation. A broker can help you create an agreement that is fair to all owners and that makes provisions for what happens if one owner wants to move or begins to experience financial instability.
A broker can help you set up legal conditions that protect your interests and investments. Your broker can also help you find the right lender to suit your requirements and your ongoing home buying expectations.
Need help navigating the complexities of joint ownership with confidence? Our team is here to help! Contact the best mortgage broker Sydney has to offer at Our Top 10.
