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Want to achieve the age-old dream of home ownership? There’s something special about money well spent on that slice of land that’s now yours. But sometimes that dream can feel like just that – a dream. But Kiwibank wants to turn this into reality by supporting people to team up with friends or whānau! Co-own is a different way to buy through combining savings to achieve that deposit goal faster and together borrowing the amount that is needed to buy the property you’re all after, getting everyone on the property ladder sooner. It also provides the ability to share ongoing property related expenses such as home maintenance, rates and insurance.
So how does it work?
Teaming up looks different for everyone. For example, you could borrow together with a group of friends, with siblings, or be a couple teaming up with another couple. Everyone needs to be on the same page, trust one another, and be comfortable that their personal information will be shared with each other. Co-ownership won’t suit every body and we strongly recommend all co-owners have a property sharing agreement in place before the property is purchased so that everyone’s on the same page and any potential issues are sorted before you get too far down the track.
Joint home loan structure
At Kiwibank, it’s common for Co-own arrangements to have a joint home loan structure where all co-owners are borrowers. For joint home loans, you’re still each individually and together liable for the entire home loan. It’s a team effort and together you’ll decide how the loan is structured, for example it could be split into portions with different loan amounts and repayment terms. If at least one of the co-owners will be living in the property, then generally a combined deposit of 20% of the purchase price is required!
Commence your Co-own journey
“Buying a home with friends or family can be very exciting. But it’s not without challenges and risks that could put stress on any relationship. We always recommend that co-owners discuss possible scenarios and openly share their expectations. Having those challenging conversations upfront can be nerve-wracking but it’s the best way of ensuring you’re all on the same page before commencing the Co-own journey,” says Kiwibank Senior Product Manager Home Lending, Pip Maxwell.
To learn more:
Sound appealing? Want to get your team together and slap that sold sign on your dream home? For more information and advice about Kiwibank Co-Own talk to one of our leading mortgage advisers and check out the video below.
Nicole is the General Manager of Home Lending at Kiwibank – the largest New Zealand-owned bank. Nicole has spent her career working in financial services in Australia, Europe, and New Zealand across a range of disciplines including product management, sales, risk, and change.
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