3 Pros and 4 Drawbacks of buying joint property
Housing costs in Malaysia are increasing daily, and since many people claim they cannot afford the expensive housing costs on their own, more and more people are seeking to buy a home jointly. But what pros and cons come of buying a joint property? Let’s take a look .
The advantages of purchasing a home together:
1. The application success rate is pretty high
Financial institutions typically offer relatively lax consideration, the debt is borne by two people, and the possibility of default is quite low because applying for a bank loan jointly might diversify some risks.
2. You could purchase a better home.
You can borrow more money overall with a joint loan from the bank, and since you have more capital supporting, you can invest in property with higher returns, such a bigger house and a better location.
3. Lower interest with a larger down payment
If you buy a house together, you can apply for your provident fund second account deposit because there are more funds available between the two of you and a larger down payment. You must be aware that bank housing loans often calculate interest using compound interest, and a sizable portion of your monthly loan payments goes toward paying interest.
The disadvantages of purchasing a home together:
The most terrifying possibility when purchasing a home together is experiencing relationship changes, such as a husband and wife divorcing, siblings discord, etc.
1. The other must assume the full housing debt if one of them is unwilling to make additional contributions or is unable to return half of her contributions in order to prevent the bank from listing off the property.
2. If one of them declares bankruptcy, the assets in his name would be impacted, which will also have an impact on the co-buyer.
3. There will be issues that outsiders cannot solve if one of them wants to sell the property and the other refuses.
4. Two people’s financial histories will be connected. The bank will merely decline to grant the loan if one of them has a poor credit rating.
Observations to make while purchasing a home jointly:
1. Financial institutions often only permit purchases made jointly by brothers, sisters, couples, and parents and children. The joint application from two couples or groups of friends may not be accepted.
2. To avoid having to deal with any of the above issues in the future, it is preferable to have an agreement in place before you buy a house together, especially if you are not related, such as boyfriends, girlfriends, or friends.
