Buying a property with trusted family members, friends, or other single mothers can reduce costs and ease the financial burden.
A co-ownership agreement legally outlines ownership shares, responsibilities, and exit strategies.
Why Consider Co-buying?
- Lower financial barriers: Share the cost of the deposit, mortgage repayments, and property maintenance.
- Increased borrowing power: Combined incomes can allow you to access higher-value properties.
- Supportive living: Co-owning with trusted individuals can provide emotional and practical support, particularly for single mothers.
How It Works
Decide whether the property will be held as joint tenants (equal ownership) or tenants in common (proportional ownership).
- Joint tenants: Equal ownership, commonly used by couples or families. If one owner passes away, their share automatically transfers to the other owner(s).
- Tenants in common: Ownership shares can be unequal and are defined based on each person’s contribution. Shares can be sold or passed on to others.
Legal Agreement
See a lawyer to get a co-ownership agreement that includes:
- Ownership percentages.
- Contributions to deposit, mortgage, and ongoing costs.
- Rules for selling or exiting the agreement.
- Dispute resolution mechanisms.
This document is critical to avoid misunderstandings and ensure all parties are protected.
Financial Planning
Agree on how financial obligations will be split, including:
- Mortgage repayments (who pays what amount).
- Maintenance and repair costs.
- Property insurance and rates.
Loan Applications
- Apply for a joint loan. Each co-buyer’s financial situation will be assessed individually.
- If one party has a weaker credit score, it could affect the terms of the loan.
Advantages
- Shared costs: Splitting expenses makes homeownership more affordable.
- Access to better properties: Pooling resources allows you to consider higher-value homes in better locations.
- Flexibility: Ideal for those who want to live together or invest jointly without long-term commitments.
Challenges
- Differing priorities: Ensure all co-buyers agree on key decisions, such as property type, location, and future plans.
- Exit strategy: Selling or refinancing can be complicated if one party wants to leave the agreement.
- Legal risks: If one co-buyer defaults on the mortgage, all owners may be affected.
Example
A group of three single mothers pooled their savings to purchase a property in regional Victoria. They structured the purchase as tenants in common, with each owning a one-third share. By sharing mortgage repayments and childcare responsibilities, they reduced financial stress and built a supportive living environment.
CSMC’s Housing resource was made possible thanks to the support of:
