It has long been challenging to get on the property ladder. Affording a home has long been impossible for young single people in modestly paying jobs.
Reports in late 2019 showed that more people were purchasing homes with their friends, splitting costs in an expensive market. It is an option that is perhaps dismissed too readily by wider society. Anything that puts a roof over one’s head during economic uncertainty is worth investigating further.
Some people understandably have reservations about buying a home with a friend. It is a worthwhile endeavor if you put the right amount of thought and effort into it. Consider the following points to make the process easier.
Choose the Right Friend
Ensure that the person you choose to live with is of good character when you are buying a home with a friend. Benefit from a friendship that has spanned years if possible.
Remember that conflicts can be common among anyone sharing a home together. Evaluate your friend’s qualities privately. Ask yourself:
- Is your friend frequently noisy and dirty?
- Are they responsible figures in their daily lives?
- Will they be upfront with their finances?
- Does their income better your homebuying prospects?
Do not accept invitations to buy a home with a friend on a whim. Trial your co-living arrangements under a rent agreement before homeownership if there is any uncertainty about how well you will get on.
Try to be on the same page with your commitments. Anticipate having equal shares in the property so that you can sell together and avoid instances of one friend undermining another’s authority during crucial homeownership decisions because they own more of the property.
Approach Lenders Together
Prepare for teamwork when you are buying a home with a friend. Approach lenders together, as these parties will need to know who they are working with and why.
Work together to find the most capable lenders you can. Book free consultations with The Home Loan Expert, who are among the best mortgage lenders in Kentucky and other states. Utilize their years’ worth of experience for peace of mind. Avoid petty arguments over which lender is best, as The Home Loan Expert offers the lowest rates on the best loans.
Draft any questions you may have together, as each of you may have unique lines of enquiry that can cover more ground. Use this process to gauge whether your friend is as equally proactive and enthusiastic as you are. Remember that you can always back out before anything is signed, so remain analytical at this juncture.
Discuss the Endgame
Remember that buying a home with a friend is not the same as buying one with a romantic partner. Adopt the perspective that the shared homeownership will end eventually.
Create a loose plan for how the shared ownership might end. Refrain from creating a strict timetable, and you will avoid unnecessary pressure. Do account for life happening at any moment and that either of you may meet a romantic partner in the next few years and wish to settle down with them instead.
Make sure that your legal documentation reflects these attitudes. Get it all in writing so that handshakes and promises are not forgotten or disputed when your commitments end months or years later. Divide assets fairly and reasonably. Mitigate the chances of any shocking surprises or bitter conflicts through these arrangements.