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Intergenerational Home Buying & Lending: A Growing Trend in New Zealand

In recent years, a noticeable shift has emerged in New Zealand's property market: more families are choosing to buy homes together. This trend of intergenerational living isn't just about sharing space; it's about combining resources to overcome financial barriers, care responsibilities, and more. In this blog post, we'll explore why New Zealand families are increasingly buying property together and the considerations involved in these arrangements.

Why Families Are Buying Together:

  • Generational Financial Benefit: Combining resources can significantly reduce the financial burden on individual family members. For instance, parents and children pooling resources can mean a larger combined deposit and greater borrowing power.

  • Practical Benefits: Shared living can simplify childcare and care for older family members, providing a supportive environment for both older and younger generations.

  • Economic Necessity: As house prices continue to rise, joining forces can make home ownership more accessible for younger family members who might otherwise be priced out of the market.

How It Works:

Intergenerational home buying typically involves parents and their adult children, but it can also include other family configurations. The process includes:

  1. Financial Assessment: All parties must be evaluated to determine their lending capability, especially if everyone will be listed on the property title.

  2. Legal Considerations: It’s crucial to establish a relationship property agreement with the help of a solicitor. This agreement should outline contributions from each party and the procedures for any potential future sale or changes in ownership.

  3. Bank Policies: Some banks offer tailored lending solutions that split the mortgage in ways that reflect each party's financial contribution and earning capacity.

Planning for Success:

  • Long-Term Commitments: Families need to discuss their long-term goals and potential exit strategies. This might include adding secondary dwellings to the property, which can provide additional privacy or income.

  • Legal and Financial Advice: Engaging solicitors and financial advisors early in the process ensures that all legal and financial aspects are thoroughly managed.

Buying property with family members can be a fulfilling way to secure a home in today's challenging market. It offers financial benefits, practical solutions for care, and the joy of living close to loved ones. However, successful intergenerational living requires careful planning, clear agreements, and open communication.

Interested in exploring intergenerational living? Contact My Mortgage today to discuss how we can facilitate this journey for you and your family, from finding the right property to securing pre approval.


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