Buying a property with your partner can be one of the most exciting milestones in your relationship. The planning, the decorating and the housewarming after you move in… But as exciting as it is, it’s a milestone that should be entered after careful consideration because whilst it’s romantic, it’s also a huge financial commitment that can affect your finances outside of the relationship. Here are some things to keep in mind when thinking about taking that next step.
Do you want the same property style?
Flat or House?
New Build or Old Build?
Fixer-upper or recently renovated?
You should always have these discussions before your house hunt commencing to ensure you’re on the same page. After all, it’ll be both of your names on the property, so you need to ensure you’re happy with it, or at the very least, share the same vision of what it could become.
Determining deposit contributions.
How much will each of you contribute to the deposit?
Are you happy to pay more/less than your partner?
Do you want your contribution protected?
These are things you need to ask yourself first and foremost, to determine your comfort levels, and then have an open and honest discussion with your partner.
Have you had “The Talk”
No, not that talk! The one about your credit history!
When you are purchasing a property together things that may have been unknown previously, get uncovered—especially if you are getting a mortgage together as it leads to being financially linked, not just through the mortgage itself, but through your credit report information too.
You should be open and honest with your partner about your credit report and credit history before the paperwork stage commencing. After all, it’s much better to hear certain things from your partner, than it is your mortgage broker—nobody likes to be caught off guard!
How do you want to own the property?
Joint Tenancy or Tenants In Common?
With a Joint Tenancy arrangement, you will co-own the whole of the property and neither of you will have a specific or identifiable share. This means that if you sell the property, you are each entitled to half of the sale proceeds, regardless of how much you each contributed to the purchase price or who paid the mortgage repayments. Neither co-owner has a separate share in the property that can be sold and when you die, the survivor will automatically own the whole of the property, regardless of any wishes you may have made in your Will regarding the property. This is called the right of survivorship.
With a Tenants in Common arrangement, you will each own a specific share of the property – usually a 50% share each, however, it is possible to have unequal shares.
As you each own a separate share in the property you are all entitled to leave your share to your chosen beneficiaries in your Will. If you do not have a Will when you die, your share will pass to your nearest living blood relatives according to the Rules of Intestacy.
You will discuss both of the options in detail with your solicitor during the process but it’s good to have an idea of your options beforehand to avoid making a rushed decision.
Preparing For A Potential Break-up
Okay so… chances are this won’t be at the forefront of your mind when you’re looking to commit to your partner with a property. But, it’s something to give thought to. For example, if the mortgage amount was based on a dual income, would one person be able to afford it alone, should the other move out? Would you both continue to contribute equally, or would one person foot the full amount—bearing in mind that legally, you’ll both be equally responsible for making the payments on time.
Your Rights As A Homeowner
As a joint owner, both you and your partner:
- Are liable for making the mortgage payments
- Must give consent to sell the property
- have equal rights to reside in the property
- Must give consent to raise a mortgage or loan against the property
But if you’re unsure of the arrangement specifics, fear not—your solicitor will go through all of this with you!
If you have clarified all the above and are about to embark on this journey, enjoy it! This is such an exciting time in your lives, document it, embrace the feelings and take it all in because this is something you will want to remember forever.