You know each other well enough to roughly know each other’s spending habits, but you probably don’t know each other’s complete credit history. So, before you buy a property together, there are plenty of discussions you need to have. Here are three easy questions that can start this conversation.
Have they defaulted on any payments?
They might be relatively debt free now, but has this always been the case? One bad mark on a credit file, such as a late car payment or a default on a credit card, will change the approach you need to take when applying for finance. This doesn’t necessarily mean you won’t be able to get lending, but it may mean you need to apply to a specialist lender for a low documentation loan. Our team can help you find the right lender and craft an application to avoid the heartbreak of continual rejection.
That savings balance, where has it come from?
If your partner has savings towards a deposit, that’s fantastic, but the lender will want to know how that money was saved. If they have managed to build up those savings over a good period of time, making regular contributions, lenders will look on this favourably as an indication of having good financial habits. If, however, the savings are the result of a redundancy payout, a gift from family, or backing a good horse, they are still helpful as a deposit, but won’t indicate an ability to be able to manage repayments. This is not the end though, even if your deposit did come as a gift from family or a payout of some sort, you’re still in a great position in terms of a deposit but you may need some additional support in submitting your application in the best light.
If we did get into financial trouble, what would we do?
You must plan for every eventuality, even one you think is not likely. Having said that, this discussion isn’t so much about having a solid plan in place for the worst, as seeing how your partner would deal with difficulty. If one of you lost your job, or you had unexpected bills that seemed overwhelming, would they try to struggle through, not wanting to talk about it with you or with your finance broker, and potentially default on the loan? Or would they tackle it head on by visiting your finance broker or lender with you to make a plan to get through it without defaulting?
