Getting on the property ladder is all about getting started, and there are so many ways to do just that. With so much to spend your money on, whether it’s traveling, socializing, or all of the above. Finding the means of saving a deposit is no mean feat. A growing proportion of first-time buyers are now choosing to buy with friends. The process is a little more complicated, so it’s important to go about things the right way.
You can buy with up to four people
Up to four people can put their names on the deed, so even if you’re a far cry from getting together a large enough deposit to buy a home completely independently, you could be closer to owning your first home than you think.
Tenants in common
This is the most popular form of agreement and allows each person you buy a property with to own different shares in the property, and you can pass on your share of the property in your will. This differs from “joint tenants,” which means you have equal rights to the entire property and can’t pass on your share in a will.
The less, the merrier!
Perhaps you believe that the more, the merrier! It certainly will reduce the cost of your mortgage payments. However, it’s worth noting that if one of your house co-owners can’t pay their share of the mortgage, then the rest of you are liable. Needless to say, the fewer people involved, the simpler the arrangements.
Borrowing
Most high-street lenders will gladly lend to two buyers; however, the options for mortgages with four buyers are more limited.
Have an exit plan
It’s important to set out in a contract a good get-out clause covering the circumstances in which the property can be sold. Include how the profits from such a sale would be divided if certain individuals invested in its development, as well as anything else you feel is relevant. Then, when the time comes to sell up and buy your own house independently, the process is as seamless as possible.
Finding the right home
It’s important to find the right home that everybody is going to be happy with. Location is key to keeping the peace. The minor details of bedroom allocation are critical when purchasing a home in which you and your co-owners will be happy and thrive.
The doorway to owning your own home
Buying a home with your friends is a great way of rapidly speeding up your next steps on the property ladder. Taking house prices out of the equation, as you pay your mortgage and build up equity, you are effectively saving a deposit for your own home.
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