If you decide to buy a house with a friend, the mortgage lender will base approval on your combined income and the average of both credit scores. This increases your financing opportunities, and with two people splitting the down payments and closing costs, you spend less money out-of-pocket.
The Bottom Line. Buying a house with a friend has a lot of benefits. It may be easier to qualify for a mortgage and you get to share all the monthly expenses, including utilities, maintenance or repair costs, and the mortgage payment. And unlike renting, you get to build equity as you pay down the loan.
Sharing the cost can make getting on the housing ladder more affordable. For instance, a deposit, purchase fees and mortgage payments can be shared amongst you. Once you move in, you'll also be able to share the cost of maintaining the property and bills such as council tax.
Table of Contents:
A joint mortgage is when you apply to borrow money to buy a home with someone else, like your partner, a friend or a relative. Everyone who applies will have to meet our lending criteria, and they'll be jointly liable for the mortgage payments.
Absolutely. You can co-finance a house through a lender with one or both parents. Under current lending regulations, you can even jointly buy a house with the support of someone who is neither a family member nor a spouse.
Another way to protect yourself is to understand the different forms of property ownership. For instance, if you own real estate as “joint tenants,” then you each own 50% of the property. You can't leave the property to someone in your will; if you die, your share of the property automatically goes to your partner.
Split ownership costs fairly until the house sells
until the property sells. The amount owed by each party is typically split by the percentage of ownership. If you own 50%, and your two co-owners each own 25%, then you'll need to cover half of all housing expenses while your co-owners split the remainder.
Instead of buying a home and paying the mortgage yourself every month, consider a first time buyer investment property to rent out. ... Plus, charging more for rent than your monthly mortgage payment will produce extra cash flow that can go towards debt, bills, rent or savings for the down payment of your next house.
It is possible to get a three-person mortgage, but keep in mind that some mortgage lenders will only consider this if all of the applicants are blood relatives.
Unmarried couples will apply for a mortgage as individuals. This means the partner with the stronger financials and credit score may want to purchase the home to get better mortgage terms and interest rates. ... This may help you and your partner qualify for a larger mortgage since you're combining two incomes.
The decision to buy a house with your boyfriend or girlfriend can be a good move. Some of the benefits of purchasing a home with a boyfriend or girlfriend include: You can qualify for more. ... Purchasing a home together means you'll be able to share expenses, saving money in the process.
Buying A Home From A Family Member: The Process
Yet No Comments