I read recently that in London and New York, some first time buyers are finding it so hard to crack into the market, they’re purchasing single rooms and gradually increasing their mortgage share over time. So, as a 21 year old, you buy a bedroom for £60,000 in an apartment worth £300,000, and over time, you slowly take on more debt, buying more of the house in the process.
Sounds insane, but not too long ago you’d be forgiven for thinking that the idea of teaming up with friends or family to buy property sounded far-fetched!
Yet, here we are in 2015, many of us forming partnerships in order to land our first place.
Before you and your BFF pool your resources and start visiting open-houses, make sure you both sit down and consider the following:
Who pays for what?
Ideally, you’ll have chosen your property partner wisely – they’ll be good with money, they’re mature enough to meet their financial commitments. You’ll both be aware of the type of ongoing costs a property racks up.
Set ground rules
Putting a co-ownership agreement in place will protect you both from the get-go. It’s a legal document that sets out your commitment and expectations of each other, and it should outline what steps are to be taken in the event of a falling out.
Get the right cover
As soon as you become a property owner, you’ll be responsible for meeting substantially higher financial commitments than you’re used to. There’s probably no better time to consider your level of personal cover.
Get your finance right
You and your buying partner may be coming from separate Financial Institutions, but financing your property will have to be done through a single organisation.
Be sure to carefully consider your options, and make sure to make the most of your borrowing power using your pooled resources. You can calculate your borrowing power with The Greater using our free calculator.
Clue's in the title
Getting the title on your property right is key to avoiding complications in the event of a death, illness or disagreement. You should each consider getting legal advice to decide on the right option for you.
- Joint Tenants: this means that if one party dies, the property is transferred to the co-owner, despite what may be listed on the deceased’s will.
- Tenants in common: In the event of the death of a co-borrower, the deceased’s property rights pass to whoever is nominated in the will.
The Greater has been helping customers reach their property goals for over 70 years.
To see how we can help you, why not check out our range of great value, straightforward Home Loans, and if you’d like any more info, or just to chat with an expert, simply Make a Home Loan Enquiry online.
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