If you’re thinking about buying a house jointly with parents, you are not the only one. In fact, 56.9% of recent first home-buyers relied on family assistance in some form. If Mum and Dad are giving you a leg up onto the first rung of the property ladder, here’s what to expect.
It’s More Common than You Think
First, let’s look at some statistics. Buying a house jointly with parents is more common in Australia than you’d perhaps think. Accounting for $92 billion worth of loans nationally, the bank of Mum and Dad is the fifth biggest lender in 2020. In the last two years alone, parental help in buying a home has increased by 41%, according to Mozo.
Your Financial Habits
Whether your parents are going guarantor, loaning you money or providing assistance in another way, expect your parents to scrutinise your spending habits. And no, we’re not talking about what you spent your pocket money on as a kid. Your parents can have a varying level of involvement with the purchase of your new home, along with a varying level of associated risk. It’s important to understand that your parents need to look after their financial interests too.
You’ll Look at Many Locations
When you join forces with family in the home buying process, it enables you to look at locations you may not have been able to if you were on your own. Consider casting your search wider, looking at well-connected communities further out from the city centre. If you’re looking for an affordable dream home to buy jointly with parents, consider buying a house and land package in Savana. It the benefit of being part of a master-planned community such as Savana, the amenities are designed with accessibility and community in mind. The reason many young people buy jointly with parents is that they are able to buy in a better location; Savana is affordable and well-situated.
Get Clear on Expectations
If your parents are gifting or loaning you the money for a deposit, it’s fundamental that both parties are clear about expectations. There are advantages and disadvantages associated with both; it is always a good idea to seek professional advice if you can on what best suits you. Lenders generally prefer money to be a gift, but the biggest drawback with this option is that parents lose the right to reclaim the money at a later date.
See it as a Business Arrangement
Home-buying is often an emotional process, and bringing family into the mix can make this even more so. That’s why it is advisable to see it as a business arrangement rather than a personal one. Enlist the help of a professional and draw up a co-ownership agreement, so both you and your parents understand what joining forces will mean.
Buying a house jointly with parents has the potential to get you into your dream home much sooner than if you were on your own. Speak to the team at Savana today about the possibilities that can come with building a home in a masterplanned community.
As a boutique village address that offers an exceptional location and a true sense of neighbourhood spirit, it all comes together at Savana. You can start your new journey by purchasing land at Savana, so enquire today.
At AVID, we create places where people love to belong. To find out more about our developments in New South Wales, Victoria and Queensland and how you can invest in the home of your dreams, contact us today.