Money Talks

Buying your first house can be daunting, especially when your parents become involved. Experts Janne Dannerup and Tony Skeens weigh in.

Q. My husband and I are buying a house. Both our parents are putting money into the property to assist us, but my parents are able to contribute more than his. How do we navigate the power dynamics?

Contract discussions
The first matter to look at is the loan itself. To avoid any financial run-ins, draw up a legal contract that explicitly states how your repayment terms will be conducted. Have a lawyer present, so you can receive legal counselling before signing anything. Tony Skeens from financial education specialists North Star Solutions says couples should consider the following:

A personal budget. You and your partner should each have your own. Include your income and expenses to determine how much you can pay your parents back.
Hidden costs. Transfer duties, bond registration fees, conveyancing fees, the bank’s initiation fee and outstanding rates are all part of buying a house.
Split the ownership. If the amount each parent brings in differs, consider a contract where ownership of the house is split into the proportion of the deposits. If your parents pay 80% of the deposit, perhaps you should be entitled to 80% ownership? Or arrange higher payment options for your husband so that ownership is split equally in the end.

Feel at home
Buying your first house can be daunting, especially when your parents become involved. Experts Janne Dannerup and Tony Skeens weigh in Relationship-power dynamics

The second matter is the parental dynamic.
If your parents lend you money, this ‘shouldn’t entail having a say in how your household is run,’ says psychologist Janne Dannerup. Set up boundaries with your folks by keeping the financial arrangement simple. ‘That way, everyone knows exactly what their roles and responsibilities are.’

To avoid any uncomfortable situations,‘never discuss money matters during family gatherings,’ she says. Rather designate specific times to talk about it, and hold these discussions face to face. Don’t include siblings, friends and extended family. Two things to talk about are:

How do you handle financial disruptions?
If you were suddenly retrenched or your business folded, how would you deal with it as a couple?
If your parents happen to fall on hard times and need extra money, how will you – and they – deal with your agreement?

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