Examine your bond partner

Isaac Moledi

Isaac Moledi

Are you planning to share a mortgage with a friend, sibling or partner?

Look before you leap, says Saul Geffen, chief executive of MortgageSA, one of the country's leading bond originator.

It is true that with the average house price creeping towards R1million more people, especially first-time buyers, may find it difficult to own a decent house.

But protecting your investment is crucial when considering buying a house with a partner, he says.

So before rushing out to view properties, Geffen says potential partners need to ensure their goals and finances are aligned and every aspect agreed upon must be covered in a contract.

Both partners also need to discuss in full their financial circumstances.

Make sure you know where your partner stands in terms of his or her finances such as income, monthly expenses and savings, and be prepared to do the same.

Be prepared to have meetings about important issues affecting both of you even after the property has been bought. This, says Geffen, will ensure there are no surprises a few months, or even years, down the road.

Another important issue to discuss is an exit-strategy as it is unlikely that friends buying together will live together for the rest of their lives.

The contract should also cover other unexpected situations such as what happens to the property in the event of the death of one of the partners, if there is a fall-out or if one of the partners experiences financial difficulties.