Joint mortgage in house share with friends

oscarbellville

Hi there,

I am 23 years old and in a stable job. me and my 2 best friends are looking to move into a house together, they are both in the same position.

One of the 3 has a lump sum he can put down for a deposit on a poperty. We are looking at 450,000 - 500,000 for the property in London. He is able to put down £300,000 as the deposit.

Between the three of us we could pay around £2000/month towards the mortgage. The idea being in the end that the two not paying the lump sum have a small stake in the property. I have no idea about mortgages and property, i dont understand how to calculate the monthly ammounts and how long it would take to pay back, as i have no idea what the interest rates are etc.

Questions:

If we were paying back £2000 a month on a £150,000 loan, how long would it take do you think?

If one of us was to move out, would it be as simple as renting the room out to someone to cover the monthly mortgage, or is it more complicated with tax?

What are the potential pitfalls with a set up like this?


I would really appreciate some advice on this? I just feel so confused by everything i am reading!

many thanks,

Oscar

CLAPTON

there are loads of calculaor on the internet to work out mortgage payment or just look at a bank/building society under mortgages and most have a calculator

however you need to know the interest rate before you can work it out
but e.g. at 5% the 150,000 paying 2,000 per month would take 7.5 years approx.

you can find out about interest rates by lloking at building societies and bank websites.

the MAJOR problem is how you leave the deal
no you can't just walk out as you will each be fully responsible for the mortgage; if one can't pay for any reason them the others must otherwise the house could be repossessed.
if you wanted to get off the mortgage to (say) buy another property with a partner then they would have to either sell or remortgage; depending upon circumstances then they may be difficult or impossible

i would avoid.

hazyjo

If one has a £300,000 deposit - pretty damn huge in anyone's budget(!) - why does he want 2 others on board? I can understand him buying something large and renting two rooms out to help out mates, or make a bit of cash, but I don't understand why he'd want two others on the mortgage!

At 23, I'd be very wary of buying with friends. Situations change very quickly after that age.

Jx