What are your Homebuyer strategies for buying a home sooner?

News.com.au asked us for our tips to help first home buyers into the market, and we had a few - here's just one of them:

SCENARIO 1: SIBLING/FRIENDS BUY TOGETHER

An approach that is becoming more popular as affordability worsens, chipping in together with siblings or friends to buy a home is particularly beneficial for single borrowers, mortgage broker and founder of Two Red Shoes Rebecca Jarrett-Dalton says.

“You can combine your deposits. You can combine your borrowing power,” she says. “But you are joining a committee.”

Buying with a sibling? Make sure you seek legal advice in the process.

There are only two lenders that offer loans especially for this scenario, where the lending is split between parties. If you can’t get one of these loans, you may find that you and your sibling (or friend) will be sharing mortgage commitments much like a married couple does.

“If your mate doesn’t pay his part of the loan, then the bank expects you to pay his share,” she says.

This becomes particularly relevant if one of you wants to invest in another property. If the loan is a split one, then you will likely only carry your half of the debt. However, if it’s not, the new bank will most likely assess your current liability as being the total remaining debt on the property – not just your half.

TIPS FOR BUYING WITH A SIBLING OR FRIEND

If you are considering buying a property with a sibling or friend, there are some steps you can take to avoid being tied together at the hip financially later down the track. Here are three options to consider.

1. See a solicitor – Signing a co-purchasing agreement before buying enables you to figure out what should be done if either of you falls into hardship, gets married or wants to leave the arrangement.

2. Arrange a split home loan – this separates your financial commitments and could help you further down the track if you want to buy a property separately from one another.

3. Agree to sell – You could agree to sell after a set period of time so that you both take advantage of capital growth but avoid future financial entanglement.

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