Hornsby, 19 October, 2007:  Looking for an alternative to the struggle of saving the deposit for your first property?  Buying a property with a sibling or friend can be the perfect solution to beating housing affordability, according to The Mortgage Gallery’s Ryan Dhue.

Figures from the latest Deposit Power/ Real Estate Institute of Australia Report reveal that 36.2 per cent of household income is now used to service average mortgage payments.

Many prospective buyers are understandably concerned about the impact of committing over a third of their salary to mortgage repayments.  Of course the longer it takes to enter the property market, the harder it is to get that first home.

Dhue, however, points out that property investment is still one of the best methods for building personal wealth and one of the easier ways to get started is through co-ownership. 

“Co-ownership enables you to invest in property without breaking the bank,” she said. “Coupled with the right mortgage, this can be the perfect first step up the property ladder for first time buyers.’  Not only do you have someone helping with the purchase costs, but also the ownership costs of rates, insurance and maintenance.

Surprisingly co-ownership is often overlooked by many first time buyers. According to Dhue this is often due to confusion over organising joint finance for a shared investment.

“You don’t have to be a husband and wife to jointly invest in property” explained Dhue. “As long as both buyers can service the loan it’s a fairly straight-forward process.”

Dhue cautioned buyers that co-ownership is not something to be rushed into without proper planning however.   Ownership of the property can be structured so you each own half of the property and can deal with this independently

Friends or family members thinking about buying together must carefully evaluate the status of their relationship, the type of property they’re looking to buy, and most importantly, how to divide the loan repayments.

“Remember that all parties involved are liable for mortgage repayments, so it’s vital to consider the consequences should one party fail to contribute,” he said. 

He recommends home buyers draft a co-ownership agreement with a solicitor to protect them from any confusion, disagreements or finance issues that might occur in the future.

Dhue encourages homebuyers considering co-owning a property to visit The Mortgage Gallery for professional advice on the loan options available to them.

“Talk to your mortgage broker, plan your finances and evaluate your different options before making your property purchase.

“As long as co-buyers are sensible and have partners they can trust, co-ownership can be a smart way to make home ownership happen,” he said.