Can I buy house together with my friends
Buying a house can be expensive for some people, including in Malaysia. Oftentimes, it’s because they do it all by themselves. This raises questions such as, “Can I buy house together with my friends in Malaysia?”
Sure, renting a house of any type with 1-2 friends in Malaysia is a common one, especially for students. Buying a house together with family members is also common. Yet, what about buying the house – which means, we live with our friends, for the rest of our lives instead of for the rest of our rent durations?
Those are the things that we’re going to cover in this article. We’re also going to give you pictures of the pros and cons of buying a house together with your friends in Malaysia, as well as the documents you need to do so.
Can I Buy House Together With My Friends In Malaysia?
“Yes” is the surprising but true answer to the main question (“Can I buy house together with my friends in Malaysia?”) in this article. Even though you can’t get an exemption on your property stamp duty, it’s possible to live your exciting and thrilling lives with your friends in the same house.
You can even transfer the property to your friends through the Memorandum of Transfer (MOT) or by Sale and Purchase Agreement (SPA). Additionally, you should also apply for a joint home loan and prepare for unforeseen circumstances such as breakups that can affect your joint home loan if you decide to buy a house together with your friends in Malaysia.
There are documents that both of you should prepare when deciding to buy a house together in Malaysia. Before we delve deeper into the documents you need, we’re going to give you pictures of the pros and cons of living together with friends in the same house.
Pros Of Buying A House Together With Friends In Malaysia
There are more than one ways to save money when buying a house together with friends in Malaysia. If you are lucky enough to get a lawyer who can determine the transfer property methods, you can save some generous amounts of money on the property gain tax.
Also, if you’re buying a house together with your friends, you’re going to have a joint income. A joint income is almost always in bigger amounts than an income from one person. This is particularly true if both of you don’t have dependents.
As a result, a joint income will make it easier to make choices of what types of loans are you going to borrow. Your loans will also be easier to get accepted thanks to the shared incomes.
In Malaysia, it is also possible to get cheaper entrance and purchase costs if you’re buying a house together with friends. This is because you can share the payments. Imagine this: A combined income with much cheaper payments – a perfect combination of a money-saving technique!
Cons Of Buying A House Together With Friends In Malaysia
Buying a house together with friends in Malaysia can be difficult if you or both of you are first-time buyers. Even though you buy a house together with another person or more people, only one of you will get an exemption from your Real Property Gain Tax (RPGT).
Furthermore, you can only claim this waiver once in your lifetime. If you decide to be a part of a house with more than one owner, you can also lose the waiver at the point of sale.
Since you own the house with another person or more people, it is also more difficult to get a credit assessment. That being said, if even one of the house’s owners has a poor CCRIS record, your joint home loan will be difficult to get accepted even though your shared income and other financial aspects seem to be fine.
This disadvantage is further amplified with another disadvantage in doing so. That disadvantage is the stricter assessment processes in approving loans because you are going to live with non-family members.
Non-family members such as friends also have greater chances of going by themselves at any time, which contributes to the more difficult joint loan agreement processes. You should also be prepared to decide if you’re going to split up the shares or maintain the property when you experience things such as breakups with your friends.
Documents You Need To Prepare
Now that you know the pros and cons of buying a house together with friends in Malaysia, the question, “Can I buy house together with my friends in Malaysia?” can get louder when you don’t know the documents you need to prepare.
Documents that are tied to the loans are the most important documents you should have. These documents are the Sales and Purchase Agreement (SPA) or some people call it Booking Form, Passport or MyKad, salary slips, statements from both of your bank accounts for 12 consecutive months, and income tax receipts.
You may need additional documents depending on the banks and financial institutions where both of you apply for the joint home loan. Hong Leong bank, CIMB and Maybank are the three most popular banks for Malaysians to apply for a joint home loan.
After you complete these documents, expect around 24-48 hours (or more, depends on both of your situations) to get a verbal agreement. After the verbal agreement has been issued, both of you and your friends will undergo background checks before getting a home loan.
You should also prepare a legal document that states the rights and obligations of each party should both of you split off for any reason. Make sure the document is still effective in times of splitting off.
By now, you know that the answer of, “Can I buy house together with my friends in Malaysia?” is yes.
Yet, you should consider the pros and cons of buying a house together with your friends. You should also prepare the documents for getting the loans for your house and for circumstances such as splitting off with your friends.