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A joint-bond that binds

With applications for joint home loans on the increase between unmarried couples, it is important for couples to secure their individual interest and understand the financial implications of such a bond. 
 
When Khaya and Alice returned to South Africa (SA) with some hard-earned savings, their first thought turned towards getting the best start back in the country. “We chose not to splurge on a wedding,” says Alice, “but put down a deposit on our first home instead.”
 
Khaya is still saving for lobola, but he feels they did the right thing becoming homeowners, “We didn’t want to pay rent without something concrete to show at the end of each month.”
 
Kay Geldenhuys, manager of property finance processing at ooba, SA’s largest bond originator, believes this is a common sentiment amongst unmarried couples who are increasingly applying for joint home loans. 
 
“When ooba’s February 2015 property statistics show year-on-year growth of 4.8% in residential property prices, it’s an incentive for unwed couples to pool their salaries and buy property as a priority,” says Geldenhuys.
 
However, there are financial implications should a relationship dissolve. “Despite being together for years, common law marriage is still not a reality in South Africa, so the regulations that apply to married couples don’t apply to us,” Alice says.
 
Until the Domestic Partnership Bill is enacted it remains essential for unmarried couples to secure their individual interests, which is why Khaya and Alice each appointed lawyers to negotiate a domestic partnership agreement upfront.  “We dealt with the legalities of the joint bond in a very business-like manner so that we’re covered for worst case scenarios, even death,” says Khaya.
 
The domestic partnership agreement stipulated how the bond would be repaid, the percentage contributions and ownership, how maintenance costs, rates & taxes and home improvements would be split, as well as rules of conduct for the property.   Both also had their wills drawn up to instruct what must happen should they die.
 
Khaya and Alice believe their arrangement works because of trust and transparency with their finances, which is often where couples encounter issues.
 
“ooba addresses concerns for partners who have not shared their financial status previously,” says Geldenhuys. ooba’s online pre-approval process performs necessary credit checks then advises the loan amount which a couple can obtain, in order to minimise the chance of loan defaults for which both would be liable.  
 
“Alice was listed as the primary applicant for our joint loan since she was earning the higher salary while I completed an internship.  It simplified the loan approval process significantly,” says Khaya.  “We also took out joint life-cover to the value of the loan amount, as both our names appear on the deed.”
 
“It’s not always romantic keeping records of bond payments, along with receipts for other costs, and who pays how much,” Alice says, “but, there’s nothing like a shared bond to cement a relationship.”


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