Did you know that you may be able to get a home loan and purchase a new home with someone you’re not necessarily related to? How do you do this? Well just say that you can’t afford a home loan by yourself and you may not have a large deposit but your friend has a deposit and also cannot afford a home loan by themselves. As long as you can both agree on most things, then maybe you could buy a house together.
Some banks will allow you to have separate lines. Each loan will be guaranteed by the other person. So the loan will be in your name with your friend as a guarantor. The friend’s loan will be in their name with you as a guarantor. This also allows for you to have unequal lines. For example say you’ve got $10,000 deposit, and you want to get alone. For example, say you want to buy a house worth $600,000. We will need a minimum of $30,000 plus costs. So a total of around $605000 purchase and costs.You have $10,000 deposit. Your friend has $25,000 deposit. Your loan is for $570000 in total between the two of you. Because your friend has put in more money than you so their loan will be $277,500 and your loan may be $292,500,000 to make the total of $570,000. (all these figures are approximate and can change with the times!)
That is one way of doing it. Some banks will want you both to be on both loans even though you may choose to have a split line with two different amounts on it. Both of your names would be on the title of the property so that there is no concern that you’re not getting your portion.
I strongly advise you to talk to a solicitor and get an agreement written up so that you understand what would happen if you decided to sell a property or you decided that you could no longer live in the same house or you had a change of life circumstances. The main things to think about are can I live with this person forever? Is this a short term plan? Will we share the property for say… 5 years and then sell and buy our own separate properties? What sort of property can we live in where we can both have our space?
I hope I have given you something to think about!! Maybe a new home is not so far into your future!
