Co-buying a home: what are your options?

Low interest rates and a thriving buyers' market makes it a fantastic time to get a foot on the property ladder. If cost is a barrier, there are still ways to make the dream a reality. Co-buying homes has gained ground as an exciting trend, helping first-time owners crack the market. De Lucia Group, real estate experts, explains everything you need to know to know about joint property ownership.

What is co-buying?

Co-buying allows two or more people to purchase a property together. This can include sharing the costs of purchasing the property and jointly applying for a home loan together where financing is required. If a home loan is taken, you and the rest of the co-buyers will need to meet the required credit application requirements and ensure you all contribute to the payments each month. 

Who should consider co-buying a home?

Co-buyers can unite to purchase property across the spectrum. These can be a married couple, siblings, a parent and child, extended family, and even friends. Investors can even co-buy property together in a sought-after area to flip it or create a buy-to-let opportunity. 

Something to always keep in mind is that sharing the burden of homeownership is a big commitment. Whoever you choose to partner with should be responsible and financially able to handle the risks and obligations that come with homeownership. 

What are the benefits of co-buying a home?

Buying a property collectively means that the purchase and process costs can be shared, making it more affordable. This can include registration, transfer duties, deposits, utilities, loan repayments, upgrades, and upkeep. Dealing with the process as a team means you can adopt a divide and conquer approach, especially if you need to get the property in order. 

If you've seen a property you love or wish to capitalise on a hot property market, co-buying allows you to make your move much more quickly than going solo. This can be an ideal opportunity if you wish to move from renter to owner or have your eye on drawing an income as a landlord. 

In some respects, qualifying for a home loan can be easier with co-buying. Lenders will factor in all incomes, increasing your chance of approval and securing a low interest rate. A larger deposit as a pair or group also means reduced monthly payments. 

By pooling your resources together, you will also be empowered to buy a better property in a more desirable area. This is a distinct advantage for investors looking to build their property portfolios while spreading the risks of ownership. 

How can you co-buy a home?

Each bank provides varying levels of support for co-buyers. It's best to deal with a bond originator to help you source the best home loan option. Absa, for example, does not have a set limit on the number of applicants applying for a home loan. The only requirement is that affordability and credit assessments are successful for all applicants. FNB recently made headlines with their new collective buying home loan scheme, allowing up to 12 people to apply for a single home loan. Applicants have the option to either split the payments equally or pay more towards their instalment, depending on affordability. 

If finances are still lacking, aspiring co-buyers can choose to save towards a property in a joint or shared savings account, reaping the rewards of better interest rates. The major banks have group savings accounts that each offer favourable interest rates and a range of benefits from grocery discounts to funeral cover. These include the Nedbank Stokvel Account, Standard Bank's Society Scheme savings account, and FNB's Stokvel Savings Account. 

Crush your co-buying goals with us

With years of experience, De Lucia Group has helped co-buyers make a success of their real estate endeavours. Through our partnerships we can help you get pre-approved for a loan and source the best deal. View our properties for sale to find your ideal home or investment opportunity. With our management services, we can enhance and maintain your property. We also offer insurance to help you protect your asset. Message our team, call Michael De Lucia directly on 082 493 1089, or email michaeldl@delucia.co.za for advice.

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