Buying a house with your partner can be a lot different from buying a house alone. However, while you can share the costs of buying and owning a property, this is a huge commitment and a huge stepping stone in your relationship especially if you’re an unmarried couple.

So here are some helpful tips you can use when buying a house with your partner:

#1 Save for a deposit

The home loan deposit is the biggest upfront cost of buying a house. Usually, 20% of the purchase price is required for the deposit to avoid paying for the Lender’s Mortgage Insurance (LMI). LMI is designed to protect the financial institution if you default on the loan.

Saving up for the deposit alone can be quite hard and saving up with your partner can help make the process a lot quicker.

#2 Get an estimate of the expenses

Getting on the property ladder costs more than the home loan deposit. There are upfront and ongoing expenses that you and your partner need to include in your home buying budget such as stamp duty, conveyancing fees, loan application fees, utility bills and more.

Get an estimate of how much you will need to pay all up so you can prepare financially. 

#3 Increase your credit scores

Your credit score matters when you and your partner are applying for a home loan. This sums up your profile as a borrower and this can determine how much you can borrow from a financial institution.

If you’re a married couple, the lender assesses you as a single unit. If you are an unmarried couple, you are assessed as individuals even if you are applying for the home loan together.

If you find that your partner has credit issues, it’s a good option to clean these up first before taking out a mortgage. Start paying off debts on time, avoid making loan enquiries and keep your credit card balances low to help increase your partner’s credit score and increase your chances of getting a better home loan interest rate.

#4 Know how much you can borrow

Before going house shopping, it will be useful to get an understanding of how much you and your partner can borrow from a financial institution. This can be helpful so you can filter the houses that are within your borrowing capacity.

You can use our borrowing power calculator to get a rough estimate, or you can apply for a home loan pre-approval.

#5 Discuss how you will share the expenses

You share expenses when buying a house with your partner, so it will be necessary to discuss with them how you’re going to split them.

Are you going to open up a joint account and deposit a certain amount every week or every month? Are you going to split the bills 50/50 or 70/30?

It’s imperative to have an honest conversation with your partner so you know what your responsibilities are. 

#6 Agree on the features and location

Where are you going to buy the property? Are you going to buy a house, a townhouse, or an apartment? How many rooms do you need? What kind of amenities do you need? These are just some of the important things you need to discuss with your partner when finding a property.

#7 Sign a co-purchase agreement

A co-purchase agreement is a legal document that will state the rights, obligations, and share in the property of you and your partner. This is designed to protect the both of you, as well as indicate what will happen just in case someone defaults on the loan or if the relationship turns sour.

#8 Decide on the structure of co-ownership

You and your partner will need to decide on the structure of co-ownership. Tenants in common and joint tenants are the two main types of co-ownership you can choose from.

Tenants in common is an arrangement which makes it easier to divide and sell the property if you choose. The ownership can be of unequal sizes and the title can be passed to the chosen beneficiary.

On the other hand, joint tenants is a good option for married couples. The arrangement of joint tenancy means that both you and your partner own the property equally. If one owner passes away, their share of the property will be given to the other one even without the will.

Buying a house together with your partner is not just a huge step in the relationship, but it is also a huge financial commitment. Take your time in planning and preparing the necessary documents. Make sure to have everything in writing so you know each other’s rights and responsibilities.