Wed 17 Feb 2016
More and more people are today considering buying their first property with friends to offset the demand for large deposits and mortgage payments. Here we explain the positives, possible negatives and what you should take into account.
Most obviously the benefit of owning your own home means that once the mortgage is paid off the property is yours and potentially could be worth somewhat more than you originally paid for it. Paying a mortgage can also in some cases be cheaper than renting a property!
By co-owning a property you are also splitting not just the cost of the mortgage, but your monthly bills and maintenance which can all add up.
If you decide to put in different deposit amounts the property equity should be split proportionately. Keep up to date records on this, and it would be a good idea to get a solictor involved to draw up any necessary paperwork to prevent issues in the future when it comes to selling the property.
Have a back up plan; should one of you be unable to pay your way due to ill health or other reasons you must have sufficient funds in place to cover the mortgage payments otherwise it can effect all parties responsible.
Consider a joint bank account to cover all the bills each month. Money advice service explains more about this.
Inevitably at some point down the line one of you may need/want to sell. It is best to agree up front what may need to happen at this point and if the other co-owners will be able to take the mortgage on themselves or potentially get a tenant in to over the costs.
Keep an inventory from the outset - this will prevent potential 'fall outs' when it comes to splitting your joint belongings.
Remember, this may be your home, but it is also a business transaction and one of the biggest decisions you will ever make. For mortgage advice you can get in touch with our independant mortgage advisor Richard Lester who would be happy to help.
If you're already searching ensure you register your details with your local branch; we will call you with 'coming soon' properties before they hit the Internet giving you the chance to get an early look!
"This is the first estate agents we've had a great experience with. John German exceeded our expectations and were informative and friendly, keeping us up to date every step of the way. I wouldn't hesitate to use them again when the time comes."