Mortgage Mates is like a dating app for home ownership. We match you with other users who have the same housing needs as you, enabling you to co-buy your home.
This is our first post using the Mortgage Mates blog. We have developed this space to enable us (your Mortgage Mates co-founders) to let you know more about who we are, what we do and why we are here. We hope to keep this blog active with information on how the website works, why we set it up and what our impact may be on the Australian Housing Market. The below is a little bit more about the website, and us, and we will be following this shortly with our first ‘original’ blog!
Mortgage Mates is like a dating app but for home ownership, matching you with individuals with the same housing preferences, i.e. location, cost and property type. Mortgage Mates is a revolutionary website for the Australian housing market, assisting you to enter the property market in half the time. It will allow you to choose the security of home ownership over rental properties and share houses.
Using a unique algorithm Mortgage Mates matches you to other like-minded individuals to search for, apply for and purchase housing together. By matching with another user who shares your housing aspirations you can afford to purchase a home to live in, land to build on or an investment property with less financial risks and increased legal protection.
Daisy Ashworth – Co-Founder
Throughout her 12 years experience working within the legal, housing and welfare space Daisy began to identify a growing gap in the market leading to individuals finding themselves without a roof over their head. She noticed that younger generations were simply being priced out of the housing market, with no opportunity to purchase their own home and enter a competitive housing market. It was through this experience she developed the idea of connecting individuals together to allow them the opportunity to co-own a property.
Jess Vesely – Co-Founder
In 2017, Daisy and Jess crossed paths while working in the humanitarian sector and the idea for Mortgage Mates came to life. Jess has worked in the community development and humanitarian space for 5 years, working in Nepal post earthquakes providing strategic support and has since worked in strategy and program development in the youth and community development space. Jess has provided strategic direction and knowledge on the demographics of users, clarifying the importance of the sharing culture we live in today and a partnership began to form.
Since then we have worked alongside an engineering and software team to develop Mortgage Mates into what it is today – a space to connect with like-minded individuals to purchase a home, investment property or buy land to build on.
“Through the use of innovative technological solutions, Mortgage Mates will disrupt the house market, providing all Australians the opportunity to own their own home.”Daisy Ashworth & Jess Vesely, Mortgage Mates
You may remember back in March we said good bye to our co-founder Jess as Mortgage Mates branched into a new direction . Since then, we have been in a whirlwind on all things Mortgage Mates and life in general and this is just a small update of what has been happening for us.
In April Founder Daisy got married- marrying her ‘Mortgage Mate’ and celebrating a life together despite the impacts of Covid-19. We tried to take some time at this point to recharge and refocus ready to move forward with what was to come. It was at this point that things started ramping up, especially as the team of one now has to make all the decisions 🙂 !
With Jess departing, it gave us an opportunity to reconsider the direction Mortgage Mates wanted to go in and after a lot of thought the decision was made to redevelop our website. Over the past three months we have been working with our developers to create something new and innovative which will better support our users into the space of co-ownership. (More on that later).
In May, Daisy undertook her first professional photo shoot for the website- with some of the photos captured showing above. At Mortgage Mates we are about more than just housing, we are about connection and community- so my new husband and our furbaby Bo were also included in the pictures. Whilst I don’t think the models of Italian Vogue have anything to worry about- it is great to have a professional set of pictures to use for the website, for social media posts and in media statements. We think these pictures represent who Mortgage Mates is and what we represent and look forward to sharing more of who we are as we continue to develop brand.
Along with the new website, a decision was made to be more proactive in the proptech space here in Perth. Thanks to the hard work of Ash, the Proptech Hub WA has been growing from strength to strength and we enjoy having the opportunity to take part in some of the work he is doing. In May, Mortgage Mates attended the SOCIAL HOUSING & SUSTAINABILTY SHOWCASE WA 2021 which was a fantastic opportunity to demonstrate the work we are doing in the housing affordability space in Australia. We presented alongside a range of other affordable housing services based at Proptech WA including Home Hub WA, a social and affordable real estate platform, and JNG property group which supports co-living opportunities here in Perth. There was lots of interest in how we work, and we have since developed some relationships with third parties as a direct result of the presentation. As many of you know, Mortgage Mates is passionate about the development of an affordable housing system and value getting to know other players in this space.
Later that month, Mortgage Mates was lucky enough to attend the Perth event of the first Proptech Association Australia awards ceremony, where Mortgage Mates was awarded the Proptech for Good Award. We were extremely proud to be recognised for the work we are doing, not just in proptech, but also social tech and community impact too. It makes the long hours and dedication very much worthwhile and has definitely spurred us on over the last few weeks.
Since June Mortgage Mates has been taking part in the Austrade UK Fintech Academy, looking at how and when we launch our UK platform once its development is completed.
As I mentioned in the beginning of this post, we are currently in the process of developing our new platform for Australia. Directly after this is completed we will be building our UK platform to bring co-ownership to the British market. We are extremely excited about our new branded site and the capabilities it brings, and believe it make sense to operate in both markets as soon as possible.
A survey by HSBC demonstrates that UK home owners are extremely open to co-ownership and in particular buying with a stranger!
The work our developers are doing to bring to life the vision of Mortgage Mates has been fantastic, and we are extremely excited to add in some new features which we believe will enhance the experience of our users in owning a home.
If you are interested in learning when our new site is in operation, please go to http://www.mortgagemates.com.au and sign up to our subscription service so we can assist you in signing up to our website to find your Mate and co-own a home together!
That’s it from us for now, this piece feels like just as much as a whirlwind as life has been, but stay tuned to see more of what we are up to in the next couple of months as we enable Every Australian to own a Home!
This blog post is particularly special for me (Daisy- Founder at Mortgage Mates) because we are sharing the vision of a not only a leading female UK architect, but also a close friend of mine, Jerene Irwin.
Jerene and I met in high school some 20 plus years ago (not that we like to admit this age wise), and whilst our careers took us on very different paths (Jerene studied Architecture and I studied Humanities and Law) more recently our professional expertise overlapped when it came to the subject of housing, co-ownership and community.
A bit about Jerene:
‘When I left university, like many of us, my priorities were different to how they are 15 years later. I wanted to travel and see the world, have amazing experiences and enjoy everything life offered but fundamentally I also saw owning my own home as part of my future happiness.
Unfortunately this seemed out of my reach, low starting salaries and many other expenses, plus students debts meant my options were limited. Don’t get me wrong, moving into a house share and living with strangers that have become lifelong friends was amazing but could it really be a long term solution?
Working towards or within your chosen career or even just surviving month to month, it doesn’t leave much spare cash, and owning your own house doesn’t feel possible most of the time.
I don’t think I could have imagined at 18 the direction my life would have taken, mostly because at that age your life experience is so limited, despite what you think at the time. Training to be an architect changed my perception of the world, and for the better.
The most important thing I ever learnt was that architecture was fundamentally about people, not about fancy looking buildings or spaces but the people at the heart of everything. I spend my time creating buildings and spaces that are for everyone, where they live, they work and they play, and my job is to create places that are safe, healthy, beautiful and good for the soul.’
Today it is with lots of mixed emotions that I announce it is my last day with Mortgage Mates. It has been an incredible 4 years and I’m so excited to watch where the business goes from here!
When I think back over the last 4 years, I’m so proud of everything we’ve achieved – from turning an idea into a live website with active customers, presenting at the National Housing Conference in Darwin, being accepted into the London Trade Week and participating in some amazing accelerator programs – and everything in between! We’ve worked through balancing full time work, different time zones, both founders getting married and not to mention a worldwide pandemic!
It has been a truly incredible experience that has taught me so much personally and professionally. I have learnt about the hard work and commitment it takes to run a start up and start something that is your own, but also the huge rewards in achieving something that is truely yours. I am so grateful to have had this opportunity and will never forgot these last 4 years and the impact it’s has had on me. It is no easy feat getting something off the ground and I have so much appreciation for start ups and small business owners – you truely have to pour your blood, sweat and tears into it to bring something to life!
While it has been an incredibly tough decision to leave Mortgage Mates, I’m looking forward to focusing on personal growth and challenging myself in new areas. The reason I co-founded Mortgage Mates is still so important to me. I am passionate about seeing positive social change in this world and this will continue to drive me in my next adventure. The world is in such a turbulent place right now, with so much to do and I am committed to continuing to have a positive impact on those around me. While I haven’t figured out exactly what’s next, I’m excited for a new challenge.
To my partner in crime Daisy – it’s been an incredible 4 years working together and I know you’ll continue to achieve amazing things! It all started as a pie in the sky idea over a few beers at the pub, but together we were able to bring it to life developing a website that helps to bring people together who would otherwise be priced out of homeownership – without all your hard work this wouldn’t have been possible. It has been an absolute pleasure working alongside you and your passion to see positive change in the housing sector has continued to inspire me. Your passion and commitment to this space is second to none, you’ve already achieved so much and I’m so excited to see where Mortgage Mates goes from here!
So watch this space – it’s just the beginning and some very exciting times are ahead!!
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.
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.
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 http://www.mortgagemates.com.au and see just how we can help you to safely, and securely, own a home.
As many of you know, Mortgage Mates is facilitating the ability to co-own a home by matching two or more Mates to own a home together. Co-ownership is like permanent co-living, which has been around for a lot longer than our version of shared ownership, and comes in the forms of flatmates, roommates, share houses and now, purpose led, purpose matched websites for specific individuals to co-live.
ShareAbode has been created to support lone parents in their quest to find not only affordable accommodation, but a place of sanctuary to live, work and community together whilst they navigate the world of lone parenting.
Once you have matched on Mortgage Mates, you might be wondering where to from here. Co-owning a home has lots of benefits and starting on the journey is exciting but can be overwhelming if you don’t know where to start. Check out our co-ownership manual for further support on the process. Once you’ve match though there are some simple steps to make sure the match is right and you’re on the same page. It is vital to have open conversations early and know what you would like out of the partnership, having this clarity will help ensure its a success!
Match. Enter your preferences on the website (www.mortgagemates.com.au) outlining whether you’re looking to buy an existing property or to buy land and build together. We recommend you think about your intentions with the purchase too – will you live in it or will it be an investment? Are you okay with them living in the property? Do you intend to sell in the short term or be a long term investment? Having these things clear in your mind before you meet up will ensure you are able to have open conversations to make sure you are on the same page. Also put some details about your likes in dislikes in your profile so your mate can make an informed match.
Make Contact. Now you’ve matched and though through what you’d like out of the partnership its time to start chatting. Reach out through the confidential Mortgage Mates email system to start chatting and see if you’re housing needs align and whether you’re on the same page. Make sure you feel comfortable with the other person before giving any contact details to the other person. Mortgage Mates does not provide personal details to your mate so this is completely up to you and your decision. Unfortunately, once you leave the platform Mortgage Mates isn’t responsible for how the relationship unfolds.
Meet Up. Catch up with your Mate in a public space (possibly a cafe, bar or restaurant) and start to get to know each other. Check that your housing needs match up and that you get along well. Think about some questions you’d like to ask and what information you’d like to share too. Its great to talk about your motivations for co-ownership, what you hope to get out of it and what you’d like in a co-owner. Share fun things like your hobbies, lifestyle and what your future goals are – once you have got to know your Mate, the exciting part starts!
Start the Conversation.Start the tough conversations early! Make sure you know what you’d like from the partnership but also what your expectation are. Make sure you both are upfront from the start and feel comfortable answering the hard questions and being open and transparent about your current situation. Discuss what co-ownership agreement will work for you both, and decide what legal and financial information you want to share.
Start Looking. And now the fun part beings… start looking for your house and ensure you have your loan pre-approval! Mortgage Mates has some great relationships with relevant third parties who can help you with this. We also recommend putting together a check list of your “must haves” and “would love to have”, this can make the process much easier. Make sure you’re both on the same page and enjoy the search for your new home!!
Sharing the ownership of property between two or more people or entities is called co-ownership. The co-owners can be friends, family members, business partners or strangers!
As highlighted by Pod Property ‘Over the last 15 years, house prices across Australia have risen by enough to leave a generation of Australians feeling like they are never going to be able to afford a home of their own.’
Because of how expensive property is to buy, new and innovative methods of ownership are being developed to assist people in to the property market.
Domain released a piece recently that demonstrates just how unaffordable property is in Australia:
‘A stunning rise in house prices has reignited worries about housing affordability, with experts warning workers on moderate incomes will find it harder to reach home ownership than ever.
Despite rock-bottom interest rates that made mortgage repayments cheaper, and a raft of government assistance, record high prices make it near impossible for some to save the required deposit.
It raises the prospect that Australia could miss the opportunity offered by the social shifts of the pandemic to make housing more affordable.
And the affordability problem affects all tiers of the market, from entry level buyers to current owners trying to upgrade.
New figures yesterday revealed house prices are at a record high in every capital city except Perth and Darwin, reaching an eye-watering $1.21 million in Sydney and $936,000 in Melbourne, according to the latest Domain House Price Report.
A 20 per cent deposit on the median house would be $242,000 in the harbour city and $187,000 in the Victorian capital.‘
As many of you who have followed our journey know, we created Mortgage Mates to help match two or more users to own a home together because this is one way we can make housing more affordable.
Once we have matched two Mates we assist people to link into relevant third parties for additional support including real estate, finance and legal support.
To ensure you do things safely, you can create an agreement to assist in the safe and secure ownership of a property or item. This is called a co-ownership agreement. As defined by Muffetts law firm…
The advantages of an agreement include:
Pooling your funds to contribute the initial equity in the property
Combining your borrowing powers to obtain finance on the best available terms
Sharing the initial cost of purchasing the property
Dividing the expenses and net rental income from the property in various ways
Accessing a greater range of potential investments
Repaying a mortgage off quicker and increasing net return
A CO-OWNERSHIP AGREEMENT
‘If you are considering co-ownership, it is important to obtain legal advice to make sure that the process proceeds smoothly at all times. There are many reasons people join forces to co-own property and the circumstances in each case differ, it is essential to record the parties’ rights and intentions in writing.’
‘The Co-Ownership Agreement sets out the parties’ legal rights and obligations and deals with all the likely foreseeable circumstances before they occur, including important issues such as:
Price and payment for the property
The purpose of the property (eg investment, shared or sole use or a combination thereof)
Management and contributions to payment of expenses
Maintenance and repair
How long the co-ownership is to last
How a co-owner may exit the arrangement and/or sell their share in the property
Various exit strategies
Various important legal terms to make sure the Co-Ownership Agreement is legally binding
The agreement can also determine other discussion pieces such as:
How you deal with your house or flat
Separate ownership of assets
Banking and cash arrangements
Finance and borrowing
What happens if / when you separate as co-owners
Division of capital assets
What one of you might pay to own the whole property
NOTE: Co-ownership differs from the way a husband and wife might hold a property as joint tenants (where a spouse’s share automatically passes to the other spouse on death), instead being held as tenants-in-common, which means the share will not automatically pass on death.
By using our third party agreements or support from a lawyer you already know, you can benefit from expert advice using existing legal documents to save you time and money.
Netlawman even let you complete an existing document with your own information by paying a one off fee. Some examples of questions that may be included are:
1. We are entering in to this agreement so as to record and regulate financial and other matters which will affect us as we live together,■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ ■-■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ .
2. This agreement is intended to be a binding legal document. We each acknowledge that we have entered into this agreement voluntarily without any unfair or improper ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ .
3.We now [live together / intend shortly to live together] at [address], but this agreement shall ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ .
4.We have honestly and frankly told each other about our individual assets and financial positions and have set ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ .
5. We both acknowledge and agree that this agreement has been jointly drawn by us and accordingly ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■ ■ ■ ■ ■ ■ ■ ■
We know co-owning may seem scary when you first consider it, but by taking the steps above to draft an agreement, owning with a person you have Matched with online may actually be safer than buying with some one you know. Statistics show that when buying with a partner we don’t take legal steps to protect our assets or responsibilities meaning we are more at risk, if or when something goes wrong.
So whether you are buying with a best friend, partner, family member or stranger… Consider a co-ownership agreement to ensure both of you are protected and supported through your housing journey.
The benefits of co-owning a home will vary depending on who you are buying with and why you are buying. However, as a co-ownership platform we have pulled together a few key benefits that we believe apply across all co-ownership relationships.
With the rising costs of housing in Australia, many people are looking to alternative solutions such as co-ownership as a means to enter the property market. The concept of co-ownership within property is when two or more people pool their resources together to buy a property where they share the ownership. This means that each owner will own a proportion of the property (usually spilt evenly but not always) and collectively pay off the mortgage.
The concept of co-ownership has been around for years with couples, family and friends regularly buying property together but often without putting a legal co-ownership agreement in place. For all our Mates we highly, highly recommend drawing up this agreement to ensure you are covered and are both on the same page with how the property will be managed. If you go to our Third Parties page you can find links to key legal providers who can assist you in drafting a co-ownership agreement. You can also reach out to your own lawyer for advice if they specialise in property law.
Enter the property market quicker at a fraction of the cost and time
By far the biggest benefit of co-ownership is the ability to enter the property ladder quicker due to requiring significantly less savings. By buying with another person, instead of requiring the full deposit, stamp duty and other costs associated with buying a property you only need half of this. With the current gap between yearly wages and housing prices, saving a 20% deposit alone can be extremely challenging and can take many years. By buying with another person, this will significantly reduce the amount you need to save and you will be able to enter the property marker quicker. The quicker you enter the market, the earlier you can stop paying off someone else’s mortgage and start paying off your own, have an asset you can leverage and stable housing.
2. Larger borrowing power
Next is your borrowing power. By partnering up with another person to co-own your combined income and assets allow for you to access a mortgage value far greater than what you could by yourself. With a greater borrowing power your housing options greatly increase.
3. Increased buying options
As we said above, co-ownership increases your borrowing power so you are able to afford a more expensive property. This will enable you to make less sacrifices in what you want to buy. Often first home buyers are pushed to the fringes of cities, into small apartments that may be a riskier investment or into houses that need a significant amount of work that you don’t have the time or money to do. By increasing your borrowing amount, you can purchase a property in an area closer to your dream location, whether that is driven by it being a great investment suburb, a location need your social supports including family and friends or near to employment opportunities and infrastructure.
4. Reduced cost of bills and maintenance
Further to this, you will have someone to share both the initial costs including stamp duty, housing appraisal and set up costs but also the ongoing costs of owning home. This include council rates, body corporation fees, maintenance and bills. By co-owning these costs are spilt between two or more of you, greatly reducing the ongoing costs of owning a home on top of a mortgage.
5. Increased social connection
Another benefit that you might not have considered in an increase in social connection. By using Mortgage Mates we match you with like-minded individuals who share common aspirations and values. By co-owning a home together you may find someone you have strong social connection to and can share existing social networks with each other. Currently it is stated that 1 in 4 Australians experience loneliness, by purchasing and potentially living together, you are opening yourself up to new connections, opportunities and experiences.
6. Reduce carbon footprint
It is estimated that the Australian population will grow from 22 to 36 million by 2050, requiring 6.5 million more properties. By sharing a home with someone else we can greatly reduce our carbon footprint by sharing resources including powering one home instead of two and reducing the number of houses required.
We developed Mortgage Mates because we believe co-ownership can be a housing solution for every Australian. By matching with a Mate who has the same housing preferences as you, you can experience all the benefits of co-ownership without having to rely on a partner or family member, to own a home with.
Buying a home may be one of the biggest financial (and personal!) decisions of your life. It can set you up for the future but also shapes your future. We therefore understand how important it is to make an informed decision when purchasing a house, particularly when entering into the property market through an un-traditional means like Mortgage Mates.
While we have previously spoken about the number of benefits to co-owning a home, we also want to talk through some things to consider…
Type of agreement and liability
The first consideration is establishing which form of co-ownership works for you. For our Mates, when we talk about co-ownership we are talking about Tenants in Common. This allows two or more people shared ownership rights in the same property or piece of land. In this arrangement, each owner or “mate” may control an equal or different percentage of the total property – i.e. you could spilt the property 50/50 or 30/30/40 or any number of ways. This percentage, however, is defined shares that must be agreed upon prior to sale and each owner can dispose of these shares as they wish. This is agreed upon prior to the sale of the property and will be outlined in your Co-Ownership agreement.
We 100%, completely, very strongly recommend putting in place a co-ownership agreement. This is a legally binding contract which can be used to specify how you own your home together. It can be used to set out your repayments schedules, which insurances you require to own a home together and even when you would be able to sell the property.
2. Selling the property
The most obvious concern for our Mates comes at the point of sale of the home. What happens when one co-owner wants to sell but the other doesn’t want to? This should all be clearly defined in your co-ownership agreement and discussed at the beginning of the journey.
Selling and buying a home and the associated move is expensive and disruptive. One of the first conversations our Mates should have, is how long they are planning to own this property for. Is the intention to live in the property for the duration of the ownership and will it be kept on as an investment in the future. By understanding these needs early on you can prevent issues or misunderstandings later on.
Understanding how to sell a proportion of a home in the future is also something to consider as part of your agreement. Will you enable your Mate be offered first refusal if and when one of you decides to sell and if not, which platforms can you use to sell a part of a property? There are lots of options out there- but knowing which you will use from the beginning will alleviate any concerns this may cause.
3. Mortgage repayments
Understanding your financial liability as co-owner is extremely important. Buying as Tenants in Common will mean you are jointly and severally liable for the debt on the property. To mitigate this risk, you may request in the co-ownership agreement to have income protection insurance as part of your financial packages, or that a savings amount for a number of months mortgage payments are kept in a joint account. This will enable both Mates a level of relief if one or both owners are out of work for a period of time.
Being honest and open from the beginning about what you are looking for and about your hopes for the future, will ensure you have a smooth relationship with your Mate. Asking the hard questions, such as what if I find a partner, or what if I want to start my own business from the property- will ensure you can both plan for the future whilst creating your first home.
4. Maintenance and bills
When co-owning a home together (either to co-live or co-invest), it is important to consider the every day activities as well as the start of the home ownership journey. This means that whilst it is important making the right choice for your mortgage, it is equally as important to understand how bills will be paid and who will complete any maintenance requests.
These questions will vary based on whether the house is an investment home or a co-live property. For example, if you are buying as part of an investment property, you may decide to put the responsibility of bills and maintenance with the Real Estate agent. This enables you and your co-owner to place the management of the property with a third party and simply receive your return on investment moving forward.
However, if you are co-living together, it is worth discussing the inclusion of this information in the co-ownership agreement. You may decide to pay a set amount in addition to the mortgage, to cover any costs in the property. You may also agree to pay for a maintenance person to manage any repairs on the property, so it is clear from the outset that this will be the process. If you are detailed focused, you may agree to do three quotes per repair before committing to a tradesperson to manage the process moving forward.
If you want to split the bills as part of a co-living arrangement, there are apps and companies who can assist you to manage these effectively.
5. Renting out the property
The decision to rent out the property can apply both in the beginning, if co-owning as an investment property or, in the future, when buying as a co-living property.
It is important to know how and when you want to rent a property out when you start your co-ownership journey. It is one of the ‘motivators’ now available on our website and allows you to determine, very quickly, whether your matches have the same housing needs as you.
Mortgage Mates enables both parties to live in the home, one person to live in the home alongside an investor, or for both people to own as an investment. Depending on the needs of both co-owners you will need to dertmine and log in the co-ownership contract whether it will it be a traditional rental property and if so, will it be rented via a real estate agent, or will it be a temporary rental via an Airbnb style website? If it is the latter, will this option be managed by the investors or a real estate agent, and how often will it need to be rented to ensure it meets any financial requirements?
If you and your Mate buy to co-live at first, you may end up moving out of the property and considering owning this home as an investment property. This means you continue to gain equity and build wealth, whilst also going on to live in your first solo home.
Again we suggest having these conversations early on with your Mate, perhaps agree on a five year plan, one which talks about how you co-live, and then how you hold the property after this, perhaps renting out for a further five years and then selling the house to raise funds for the forever home.
There is no right answer to how you chose to take your journey – but having clear steps, starting the conversation early and being upfront will definitely make it easier to manage long term!
As we patiently edge ever closer to 2021 and what is hopefully a happier, healthier year for many of us (whilst keeping all fingers crossed and putting no pressure on 2021 to deliver so we don’t scare it off!) It is the perfect time for us to sit back and reflect on what has been a challenging but exciting year for Mortgage Mates and both its co-founders.
Winding the clock back to the end of June 2019 (so slightly over the year in review), an idea that started as a chat over a pint at the pub between two Mates, came to life. Version one of the website launched and we worked incredibly hard to take the finished product into reality. As a focus point for us, we wanted to start developing relationships with providers that we believed could join us in providing affordable housing to everyday Australians. We spent the first six months meeting with amazing companies in the real estate, finance and legal sectors- pulling together a group of specialist agencies that can provide a unique service to our Mates as they start their home ownership journey.
We have started writing blog posts with a focus on our third parties and why they are on our journey with us. These will continue through 2021 and will hopefully share which of our ‘motivators’ the third party links into and why we have chosen them. More on our motivators later on…
Selling Mortgage Mates as an idea is always an interesting conversation to begin with. ‘So you match people to own a house…’? ‘Isn’t that risky?’ ‘Are you like the Tinder of home ownership?’ But at the end of the conversation Jess and I usually walk away with another ‘Mate’ under our belt- not because we are amazing at sales, but because the benefits of ‘buying with a stranger’ often speak for themselves. As we always say, ‘five years ago, would you have gotten into a car with a stranger? Stayed in a strangers house? Fallen in love with a stranger?’ probably not, but those things are now an every day occurrences and Mortgage Mates is the future of the sharing culture.
We were very lucky that Mortgage Mates was well received across all elements of the housing industry, with write up reviews and news articles by Peak bodies in WA, local community news papers and by Real Estate industry expert magazines. We were also lucky to be selected for a number of pitching events, including Pitch@Palace which saw us trek between Perth, Adelaide and Melbourne to be shortlisted for the final.
As we entered 2020, Jess and I anticipated our growth with live expo’s, increasing monthly users and ultimately Mates buying into home ownership. We were looking at expanding the Mortgage Mates brand into a global setting and running a platform that genuinely impacted affordable housing in Australia and world wild.
Whilst spending the first six months post launch with a focus on third parties was a risky strategy, (as every business knows that the most important people are your customers), we knew it was the right process for us. The importance of providing a quality and genuine experience was paramount, and after all what could be around the corner that would slow down our 2020 vision….