4 things you should know before buying a house with your partner.
What Type of Housing is Suitable for Couples Buying Together?
When buying a house together with your partner, in addition to external factors such as price, location, and surrounding amenities, the type of housing is also an important factor in the decision-making process.
1. Detached House: This type of housing is suitable for couples planning to grow into a large family in the future. With a minimum of 50 square meters and 2-3 floors, it can comfortably accommodate 4-5 people without feeling cramped, while still providing ample private space for family members.
2. Townhome: For couples planning to have 1-2 children, a townhome is a good option. Its overall size is not too large, smaller than a detached house, and with 2-3 floors, it's suitable for small families consisting of parents and children.
3. Condo: For couples who don't plan to have children and want a compact, easy-to-maintain space, this type of housing is a good choice. Most condos are also located close to the city center and surrounded by complete amenities, including trains, shopping malls, schools, and workplaces.
In contrast, detached houses and townhomes are mostly located in the suburbs. Buying a condo together is therefore ideal for couples who primarily want to live in the city.
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How to Jointly Apply for a Home Loan If You're Not Married
Besides the type of residence that couples must decide on together, another important aspect of buying a home together is joint financing. Even if you're not married or haven't legally registered your marriage, you can still apply for a joint loan.
However, the bank may require you to sign documents proving that you are a non-registered spouse, or you may need to provide other supporting documents such as pre-wedding photos, engagement photos, wedding photos, or if you have children, birth certificates stating the parents' names or a household registration proving you live together.
The advantages of joint financing for home purchases include easier loan approval, a higher loan amount, a longer repayment period, reduced risk distribution, and increased credibility with the bank.
Joint financing involves entering into a loan agreement for the same property, similar to a guarantor, to show the bank that another person will be responsible for repaying the loan and has the ability to pay principal and interest according to the contract. This simplifies the loan approval process.
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Important things co-borrowers need to know and prepare:
1. Co-borrower qualifications
2. Clear proof of income is required.
3. A history of timely debt repayment is necessary.
4. Sufficient income to jointly share the debt burden with the bank is required.
5. Co-borrowers should be blood relatives, such as parents, siblings, children, or legally married spouses, or unmarried couples.
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Buying a house with your partner: How is it divided if you separate?
What every couple needs to know before jointly borrowing to buy a house is ownership of the property. Generally, joint borrowing is done in two ways: putting one person's name as the sole owner but having multiple co-borrowers, or jointly owning the house with all names listed as co-owners.
Regarding joint ownership, couples who agree to borrow jointly should understand that if they later wish to sell the house, they must obtain the consent of all co-owners. If transferring ownership to one of the existing co-owners, the Land Department will consider it a sale of the house, and will incur transfer fees, withholding tax, and stamp duty. Or specific businesses.
Importantly, what to do when the relationship ends? In the case of separation, there are several ways to resolve the problem:
1. Removing the co-borrower's name.
This is divided into two cases: co-borrowing for a house with a legally married partner who has separated, and co-borrowing with an unmarried partner who has separated. For legally married couples who have separated, they must finalize their divorce. The divorce certificate and the purchase and sale agreement must then be presented to the bank to remove the co-borrower's name from the loan agreement. This allows the bank to change the loan type and create a new loan agreement.
For unmarried couples who have separated, removing the separated partner's name from the co-borrowing is less complicated than for legally married couples. However, it depends on the agreement between both parties regarding who holds ownership of the jointly borrowed asset. This requires notifying the bank officer where the loan agreement was made and informing the bank who they want to hold ownership.
2. Refinance from a joint loan to a single loan.
For this solution, banks often don't approve removing a co-borrower's name, as they assess that one borrower cannot afford the debt alone. Therefore, the best option is to refinance with another bank to obtain a single-person mortgage. (Which bank is best for home refinancing?)
3. Solve the problem by selling the property.
This is a last resort for resolving ownership division issues when a couple jointly purchased a home and need to separate. Both partners must agree on the sale, as it requires mutual consent.
No matter how far a relationship has progressed, buying a home jointly requires long-term consideration and a forward-looking perspective. It's not just about the financial investment; there are many other details that couples must consider when making a decision.
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Thank you for the helpful information from DD Property.
