Buying with a friend

Doozergirl

I'm more worried that you think it's absolutely fine to have a 100% mortgage.

You're taking on the responsibility of home ownership without having saved a penny towards it? Fair enough you like to get lagered up on a regular basis, but buying a house is slightly more serious than sharing with a mate.

Come on, you need to at least have some money for the legal fees and yeah, some furniture might be useful. If you buy with your friend and house prices were to drop, you'd be immediately in negative equity. My guess is that would put just a little bit of strain on the relationship.

poppy10_2

Doozergirl wrote: »

I'm more worried that you think it's absolutely fine to have a 100% mortgage.

You're taking on the responsibility of home ownership without having saved a penny towards it? Fair enough you like to get lagered up on a regular basis, but buying a house is slightly more serious than sharing with a mate.

Come on, you need to at least have some money for the legal fees and yeah, some furniture might be useful. If you buy with your friend and house prices were to drop, you'd be immediately in negative equity. My guess is that would put just a little bit of strain on the relationship.

Exactly, it doesn't sound like you've thought this through at all

buckers_wv

Further to my original post, I should also state that we got a 100% mortgage too. In fact it was a really crappy 5 year tie-in, variable, high-ish interest rate one. We didn't have much money if anything to use as a deposit, as all our cash went on fees and stamp duty etc etc.

If you can, definitely try and raise the minimum deposit needed, but don't let this stop you from getting a house. We didn't.

Have your own cupboards, your own shelf in the fridge, and your own compartments in the freezer. Get a joint account for all the bills and pay in so much each month. This way you'll have no arguments over who pays what. Pay in more than you need too, so when you need to fix things around the house, you can dip into this account. Trust me on this, things do go wrong.

But I'm now moving into a lovely semi-detached house with my girlfriend, and all because we bought the house when we did. If you are wary about which way the house market is going, get a property which you can tart up to make money on it that way. Ours wasnt in an awful state, it was well liveable, but we put a new floor in the kitchen and bathroom, skimmed the kitchen walls, added new carpets on the stairs and bedrooms, landscaped the back garden, painted everywhere, and got new stairs steps added (the old ones were really creaky and wobbly). Reckon we added 5-10k to its value this way.

liz545

If you're both living at home, would it be possible for you to try living together in rented accomodation for a short while (6 months, maybe) to see what it's like for the two of you to share a home? I know it's not very moneysaving compared to living at your parents home, but in the long run you're talking about comitting to a serious financial partnership, so it might help to see if you're suited to living together. After all, if you've never house-shared with someone, it can come as quite a shock to deal with all the day-to-day stuff like bills, cleaning etc!

bandraoi

First thing to do would be for both of you to move in together somewhere for six months - year while you look for a property to buy together. Living with someone is totally different to being friends with them, breaking a six month lease is alot easier and cheaper than breaking a 25 year mortgage. This is particularly important since you're both still living with your parents. Sharing a house with friends and living with your parents are very different. Major personality changes can take place in that transition.

Second thing to do is for both of you to start saving for a deposit and all the fees.

Third thing to do is to read up on ALL the legal aspects of owning a house with someone you're not married to. Then write down a list of questions for each other on the options available (eg joint tenants vs tenants in common) and see if you match up on those issues. Read up on insurance too - what happens if one of you gets sick and can't pay?

Fourth decide on the non-legal side of things, or at least discuss it - How long is this arrangement for? What happens if one of you wants to move out? What happens if a girlfriend wants to move in? What happens if a child comes into the picture? How much work do you want to have to do on the house? Do you prefer DIY solutions or to hire in professionals?

nicola1982_2

I would be careful - don't expect to make loads of money within the next few years - I know many people who have tried making money on property bought a couple of years ago and after solicitors fees etc came out with nothing.

Think about whether either of you are planning to have families etc. Also what if either of you need to move with work?

Can you both incorporate an increase in interest rates into your budget? And seriously if you can't afford furniture, deposit etc you really need to save.

To be honest the way you described your lifestyles makes me think you'd be a lot better suited to renting for now. Buying a house is not the be all and end all, especially if you haven't got a family yet.

bandraoi

On starting high school we slowly lost touch but met up again during some tests when applying for our jobs. We've then been mates again for the past four years. On starting high school we slowly lost touch but met up again during some tests when applying for our jobs. We've then been mates again for the past four years.

Hang on you've both been working and living at home for four years on a good salary and neither of you has any savings?

Also you describe not wanting to rent because of all the "dead money"
There's an awful lot of of dead money in buying a house. I recommend you work out your dead money break even time.

Work out
1) Solicitors Fees
2) Estate agents fees to sell
3) All those searches and checks.
That's your lump sum dead money.

Every month you will have an interest payment to make and some maintenance costs to pay (say 20% again on the interest payments)

Find out what your monthly rent would be for a comparable property

Now work out how long it takes for the buying to be cheaper than renting.

The answer is usually 2-3 years.

Any price increase in the property is likely to be mirrored in an increase in the price of the next house you buy.

Phirefly

Doozergirl wrote: »

I'm more worried that you think it's absolutely fine to have a 100% mortgage.

Definitely. These days, once 'unconvetional' joint purchases are now pretty straightforward whether its with a relative, freind or unmarried partner. What IS a huge risk and scary leap into the unkown is the 100% mortgage. You'd be surprised how much you could save over 6 months to a year if you put your mind to it, especially when living at home and even a 5% deposit can make a huge amount of difference to the kind of mortgage products available to you.

rob.littlefair_2

Lots of replies, thanks guys.

Alot to try and reply to but I'll do my best.

bandraoi, we've only just come onto our good salary having done a 3 and a half year apprenticeship and so havn't managed to save anything as we both bought decent cars (that are practically paid off now).

We have been on the good wage since March 26th and have currently have at least a spare grand each.

Each pay day I reckon I can add between £200 and £400 without it bothering me (unless I go on holiday or something).

So I believe that as we will be looking for a house for a while are money will build up and we will have enough to pay the fees etc.

As for buying furniture etc. I don't think that will be too much of an issue as once we have the keys to the house we can 'slowly' move in as were not pushed to move out of our parents house by a set date.

As for the deposit I think we will try and put 5% down. For houses we're looking at I think this will be about £3,000 each which we could borrow off our parents and pay back over time.


I can understand what you're all saying about renting somewhere first to check we can live together. It's a good idea but it seems like alot of hassle. Sorting lots of things out and buying things (that we might now want in the house when we purchase one) just for a few months. Despite how much people try and persuade me I don't think I'll be talked into it.


Regarding making contracts and agreeing on how the house will be run, putting money aside for things that go wrong, organising shopping etc. I completely agree and we'll do this. I work in Project Management so I like to think I'm very organised and me and my mate are always working out how much money we'd need each month etc.

Rob.

nicola1982_2

Believe me renting is a lot less hassle than buying when you do it with someone else. I have had to rent with my partner due to him being in the process of a messy divorce and it has made for a very easy relationship. When we can finally buy we know how each other lives but we've not had the initial pressure of 'making it work' in the early days.

With regards to your 'dead money' theory in the earlier post, it isn't 'dead' money because you are paying to have a roof over your head without the worry of paying to fix the boiler etc, however you aren't making an investment (which is where this 'dead money' idea comes from I think!). Don't be put of renting even on a 6 month contract because of that - the money is no 'deader' than the money spent on buying a car or going on holiday. With regards to buying things you might not want in your new house - when you first move out you take what you can - I begged, borrowed and occasionally bought (cheaply) and made do until I could afford the perfect shelving unit or sofa. You have to start at the bottom I'm afraid.

I think it's great you want to invest in your future, but I'm cautious having seen both a married couple have to sell and separate equity and an unmarried couple do the same. It's not an easy game.