select
|

Couples must have that ‘money talk’ before buying a home

Couples who are buying a home together need to be just as much in tune when it comes to finances as they are regarding the area they prefer and the type of property they want.

So says Richard Gray, CEO of Harcourts Real Estate, who notes: “Although many more people are buying solo these days, about 75% of home sales are still being made to couples - and they really do need to agree upfront about how much they can afford and how they plan to finance and pay off their purchase.

“For most people, buying a home is still the single biggest investment they will ever make, and if you are planning to do this with a spouse or a partner, you should also know everything about each other’s financial situation, including how much you actually earn and how much of that is actually left after you have met all your existing financial obligations.”

He says that if you are still paying off old debt like a student loan, for example, it’s much better to let your spouse or partner know that, and that you’ll both probably have to wait a while longer before you can go house-hunting or incur any more debt.

“Also, if one of you has had any money trouble in the past such as a judgment for bad debt, a bankruptcy or a home repossession, that could negatively affect your joint ability to obtain a home loan, and it is much better to disclose it upfront than for your partner to find out only after your joint loan application is declined.”

The next thing for couples to agree on, Gray says, is how much they can realistically afford to spend on their new home. “And again, that conversation should take place long before they begin looking at properties, for the simple reason that different people have different spending and saving habits and different approaches to obtaining credit and budgeting.

“If you have a joint pre-approval from a lender, one partner might be comfortable with buying right up to the limit of that pre-approval and the other prefer a more conservative approach. One partner might be good at saving and sticking to a monthly budget, and the other happy to live from paycheck to paycheck.”

But if you don’t want to risk an argument every month, he says, you need to be in accordance before you buy a home, about issues such as:

*Whether you want to pay an additional amount off your bond each month so you can own your home sooner;
*How much you should put aside for regular maintenance;
*What you will do if interest rates go up; and
*What you will do if one of you loses their job or has to stop working.

Gray says you should also decide how you plan to share or split the responsibility for cleaning and maintaining your property or whether you will need help and who will pay for that help. 

“And although no-one wants to think about breaking up, we always suggest that couples who are not legally married draw up a proper partnership agreement at the time of purchase that provides for the sale of the property and the division of the proceeds in that event.

“This can help them avoid long and unpleasant legal battles during what is already a difficult time, and it is always better to be safe than sorry.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK