I already co-own a home, now what…

Co-founder Daisy was in an Uber recently (go Stranger relationships!) on the way to a Proptech Innovation meeting, when she began talking all things housing to her Uber driver.

Explaining Mortgage Mates to the driver, he became animated as he began talking through a situation his daughter is currently experiencing.

The Uber driver (let’s call him Mike), explained that his daughter (let’s call her Sarah), currently co-owned a property with her ex partner. Unfortunately when Sarah and her ex partner bought the property, they didn’t purchase using a co-ownership agreement.

As we often talk about at Mortgage Mates, whether you buy with a Mate we find you, or a mate you already know, having a co-ownership agreement is equally important because, as this story will demonstrate, promises made when you care for some one, are not always kept to when you don’t.

When we have an existing relationship, and we use this relationship to own a home (such as buying with a partner), we often do so because we love and trust them, and the worry about what might happen if it goes wrong is a distant concern- or something we just don’t want to think about.

However, as Sarah was now realising, sometimes, despite our absolute best intentions, things just don’t work out, and the difficult conversation at the beginning of the home buying process can save a lot of heartache further down the line.

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With both Sarah and her ex partner now in new relationships, their previous property had gone from being their first home, to a source of contention, with both parties unsure how to proceed moving forward.

Discussing how Mortgage Mates works for our Mates, Mike became intrigued about how you use a co-ownership agreement to protect your assets, and, more importantly, how it could be used to help his daughter and her ex partner make some clear, legal and business style decisions about the property.

With both parties wanting to feel like they were making the right decision for them, whilst not ‘giving in’ to the other party, we talked through using our co-ownership manual to better understand what co-ownership is and how an agreement could still be used to better end the relationship in the future.

By signing up to a co-ownership agreement even after buying a property, it can be used to steer the culmination of the relationship into a positive and mutually agreed ending.

Although better to commence the co-ownership agreement when you first own the property, it is possible to set one up further into the relationship. In this case, for the mental wellbeing of Sarah, her ex-partner and their current partners, an agreement could clearly define their ongoing relationship whilst they continue to own this property, and properly define an exit for them in the future when the value makes selling worth while.

With a co-ownership agreement, you can make the contract as high level or detailed as best meets your needs. In this instance, Sarah may focus on an investment style agreement, something which pre agrees the property being rented out (for what cost and how long etc), an exit time frame for sale (e.g. review dates every 12 months) and a strategy for when it should be sold (eg. once it reached a particular value), it can also include what to do if one of them cannot afford to pay the mortgage any more.

However if you are going to be living with your Mate as co-owners you may also agree to include some co-living clauses as well, such as how you split bills, who does the washing up and whether a room mate can be used to increase income or reduce mortgage payments. You may even have a seperate co-living agreement depending on the level of detail you wish to include.

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As with all legal discussions, getting some expert advice in very important, and we have included some specialists who work in co-ownership on our website. However, if you already have a lawyer that you work with, or know of another specialist in this field, they may also be able to work through a co-ownership agreement with you too. Just let them know what you need and they can advise if it an area they are familiar with.

As my journey with Uber came to an end, Mike was already contacting his daughter to provide her with some information on what we do here at Mortgage Mates and how we could support their situation.

As an example, in addition to linking people to legal agreements, Mortgage Mates can also assist individuals who already own a home in other ways. By signing up to the site they can match with some one who is looking to buy into an existing property. Our Mates can consider selling a portion of their existing home to gain access to equity, whilst allowing the new part owner entry into the property market in a fraction of the time. The ability to purchase part of a home, means in situations such as Sarah’s, if one party wants to remain owning the property and the other doest, part of their equity can be sold to enable both parties to meet their goals.

If you would like to know more about what we are doing, and how we can support different users in different circumstances, go to www.mortgagemates.com.au and see just how we can help you to safely, and securely, own a home.