Buying a house with a friend

ellecarumba

Hello

My friend and I in the very early stages of considering buying a property together.

We have lived together for four years in a rented flat (with one other friend) and now both have similar salaries and deposits saved. Both late 20s, steady jobs for last four or five years.

Neither of us particularly wants to live alone and although we could both currently a buy small one bedroom flat each, together we could probably buy a either a big two bed or maybe even a three bed place with garden in a slightly nicer part of town.

Has anyone done this and what would we need to think about regarding legal issues? We would contribute the same amount of deposit and monthly repayments.

Obviously we might well not want to live together forever - I've not given up hope of I might meet a suitable man one day! What sort of things should we consider regarding drawing up legal exit strategies?

Would a mortgage lender treat us differently from an unmarried couple buying a property together? We would have joint deposit of 60k, joint earnings of 90k, looking at properties around the 400k level.

Thanks!

chappers

It can work fine, I did it with a friend of mine, provided , as you suggest you draw up rules for exiting.
Consider a minimum time before you will sell, to allow you both to equally get some equity behind you(hopefully).
Then what you are going to do if one of you wants out e.g do you just sell up and both move on or how are you going to value the property if one wants to buy the other out.
We agreed to get 3 estate agents each round discarded the highest and the lowest and took an average.
Just be happy with what you are signing up to and get a solictitor to draw some thing up

G_M

Try to imagin every possibel scenario. Discuss them and decide how they would be dealt with in the future. eg

* one of you gets a boy/girlfriend and wants him/her to move in. The other hates him/her
* one of you wants to move out. do you sell? Buy him out? geta lodger instead? what happens to the mortgage? the Title?
* one of you loses his job and can't pay the mortgage
* you disagree about spending money on repairs (eg new roof/boiler)

etc

If you sell, how do you split the proceeds? What if one of you has been paying more than the other on repairs, mortgage etc (eg one had lost job). What if there's negative equity?

Get it allnot just agreed, but drawn up in a legal deed.

robatwork

This forum and others are full of people trying to extricate themselves from a similar arrangement. You should probably consider marrying your friend (it will be legal soon) before entering into a complex financial arrangement like this.

Not ready for that commitment?

Precisely.

chappers

Rubbish if you are two reasonable people and can sit down now and have the discussion then there shouldn't be any problems, you know you can live together which is important as G_M says it's about working out now how you will handle potential problems.
I know of several people who have used this as a bunk up the property ladder to great effect.
Not sure where you live but just bear in mind the property market isn't exactly on fire at the moment, so your not necessarily going to be making decent equity if you decided to sell up, in say 5 years time, you might be better off to just carry on saving.
But yes a great idea with regards to being able to by say a three bed house so you have a spare room when you have friends or the folks over to stay

paddedjohn

Three words of advice...............Dont Do It.