The most expensive part of getting married is the wedding itself as a whole right? Perhaps not! Buying a property together as a married couple could be your largest expense. Although you are purchasing an asset for your future.
Often getting married coincides with buying a property together for your first time (unless you have already purchased a property together!). Previously, you may have:
- Lived at home with the parents;
- Rented with friends or siblings;
- Rented together; and/or
- Owned your own property or investment property as an individual
Now that you are getting married, you will no doubt want to live together. This is an exciting time in your life which you should enjoy, however, it is sensible to plan ahead for your property purchase. This is a beginner’s guide to buying your first property as a married couple, with 5 key areas you need to consider.
- You need to consider both your previous living arrangements. This will help you work out if you are entitled to any government assistance for first home buyers. Some of the key criteria for government assistance (such as the First Home Owner Grant) includes: Will it be your first property? Are you planning to purchase a brand new dwelling or an established property? Where will you be buying your first property together?
- You need to consider where you would like to live. You should aim to pick a location that not only suits your lifestyle now, but will also likely suit your future lifestyle needs. For example, if you are planning on having children in the future, you are better to plan for a suitable property for the children now, rather than buy a 1 bedroom unit now and worry about the future later. This is because buying & selling property incurs high transaction costs, such as stamp duty (tax) inspection fees, legal fees and more.
- You need to consider you budget. Can you afford to live in your desired location in your desired property type? If you can, move on to the next point! However, if you can’t you need to start thinking about ‘trade-offs’. Possible trade-off ideas include: Are there any surrounding suburbs with similar characteristics buy lower property prices? Can you make do without certain desired property features? Can you save a little bit more for that deposit by living at home just a little while longer? Are you parents willing to be guarantors on your home loan as a wedding present? Have you considered exploring the option of renting in your immediate preferred area, while buying an investment property is an alternative area you can afford? (Please note, this is just an idea for your consideration. This topic is beyond the scope of this article).
- When you are ready to start looking, it is wise to obtain a loan pre-approval. A loan pre-approval is a document that show’s how much your preferred lender is willing to lend you for your property purchase. This will be based on both of your finance situations combined. It is a good idea to obtain your loan pre-approval through a mortgage broker, as each lender has different lending rules and a mortgage broker can help you compare your different home loan options.
- You need to consider how you will purchase the property together. The two main types are joint tenancy and tenants in common. Joint tenancy in simple terms refers to owning the property jointly together in an equal undivided share. In the event of death of one of the part owners, the property is transferred to the surviving joint owner(s). Unless sold prior, the property forms part of the estate of the last remaining part owner. With tenants in common the joint ownership of the property can be split in any proportion between the part owners. That proportion of the property ownership forms part of his or her estate in the event of that individual’s death. This means the surviving part owner(s) won’t have full control of the property have live in unless they are recipients of that share of the property through the estate. The right ownership structure will depend on your circumstances including personal matters, your finances and whether you are purchasing an owner occupier or investment property
This is a beginners guide to help you start planning your first home together as a married couple. There are many other parts of the property journey and other items you will need to consider. For more tips on purchasing your first property, including all the different steps + expert help please explore our website www.fhba.com.au.
For more information on the First Home Owner Grant (FHOG) for your State please click here.
To start working our your combined borrowing capacity and have your home loan queries answer please click here to speak with a Mortgage Broker.
Please note this Blog is in no shape or form designed to replace the need to obtain professional advice from experts such as Financial Planners. All information in this blog is general & factual in nature, and should not be relied upon. Should you require advice we recommend you speak to a licensed professional before making any decisions. Please visit our website’s Terms & Conditions for more information.
