Essential Steps for Couples Buying a New Build Property Together
When you’re in love, planning a future together often includes significant milestones, and one of the biggest is buying a home together. However, purchasing a newly built property isn’t just about love – it’s also about entering into a significant financial and legal co-purchase agreement. Like any major commitment, it requires careful consideration and preparation. Here are the crucial steps you need to take before buying that new home with your loved one.
1. Assess Your Financial Health as a Couple
Before you start looking at properties, get a clear understanding of your combined financial situation. This includes checking both of your credit scores, as your ability to obtain a mortgage will depend on your credit history. Also, compile a list of your income, debts, savings, and investments. This will give you an idea of how much you can afford and the best way to approach your purchase.
2. Get Mortgage Pre-approval
Mortgage pre-approval is a process where a lender evaluates your joint financial information and provides an estimate of how much they would be willing to lend you. Having pre-approval not only gives you an idea of your budget but also shows the seller that you are a serious and qualified buyer.
3. Understand Your Legal Ownership Options
When buying a new home together, you’ll have options for how the property is legally owned. The main types of co-ownership are ‘Joint Tenants’ and ‘Tenants in Common’. Joint tenancy means both partners own the property equally, and if one partner dies, the other automatically inherits their share. Tenants in Common, however, allows you to own different shares of the property, which can be passed to other beneficiaries in the event of death. Discussing and agreeing on the most suitable form of co-ownership is essential before you proceed with your purchase.
4. Create a Co-ownership Agreement
A co-ownership agreement is a legally binding document that outlines how the property will be managed, the financial responsibilities of each partner and what happens in the event of a breakup or one partner’s death. It can cover contributions to the deposit, mortgage repayments, bills, maintenance costs, and the procedure for selling your home in the future. Having this agreement outlines clear boundaries and helps protect your interests.
5. Research the New Build Market
New build properties can vary significantly in terms of quality, price, location, and how much it will increase in the years ahead. Research the market to identify the areas with good growth potential and developers with a reputation for quality builds and after-sales support. Visit several developments, look through the show homes, and don’t hesitate to ask questions.
6. Understand the Specifics of Buying New Build
Purchasing a new building is different from buying an existing home. There may be incentives offered by developers, such as contributions to costs or upgraded options. In many cases, you may be buying off-plan, meaning you’re purchasing the property before it’s been built, which can carry some element of risk. Make sure you’re comfortable with the terms and conditions, and consider having a solicitor who specialises in new builds review all contracts before you sign.
7. Plan for Additional Costs
The purchase price of the home isn’t the only cost you need to consider. Other expenses include LBTT, solicitors’ fees, valuation fees, mortgage arrangement fees, and the cost of buying new furniture. Make sure you budget for these additional costs so that they don’t come as a surprise after you’ve committed to the purchase.
8. Get a Professional Home Inspection
Even though you’re buying a new build, having the property professionally inspected can be an added security. While this is not essential, sometimes there may be defects that are not immediately visible, and a professional inspector can provide an impartial assessment of the property’s condition before you complete the purchase.
9. Review the Warranty and After-Sales Service
Most newly built homes come with a warranty that covers certain defects for several years after the purchase. Make sure you understand what is covered by the warranty and how to deal with any issues that may arise.
10. Communicate and Stay United
Throughout this process, make sure you communicate openly and honestly with each other. Buying a new home together is a big step and can be stressful. Ensure you and your partner are on the same page with your goals, concerns, and expectations. Remember, while a new home is an asset, your relationship is the foundation that transforms a house into a home.
Entering into a co-purchase agreement is far more complex than merely falling in love and deciding to buy a home together. By following these steps, you and your partner can confidently climb aboard this exciting journey, ready to build a life together in your new home.
