Home Buyers Guide

Chapter 7: Help, I can't afford to buy a home - what are my options?

Option 5: Buy a home with a friend or family member...cont:

Example:

John is in his early thirties and earns €41,000. He has been approved a 90% mortgage of €205,000 if he buys a
property on his own. He wants to buy a home in Dublin, so this mortgage approval figure is significantly lower
than he requires.

His sister Sarah is 28 and she is also interested in getting on the property ladder. She earns €37,500.

By applying together, John & Sarah could expect to qualify for a 90% mortgage of €392,500.

Getting a Mortgage when buying with a friend or family member:

Most mortgage lenders are happy to offer mortgages to friends buying property together, as long as the friends meet with the normal lending criteria:

• Generally, they will only take two incomes into account, even if there are more than two people buying the
property together).

• You have to take out a joint mortgage together, rather than two separate mortgages.

• Borrowers are 'jointly and severally' responsible. This means that rather than being responsible to pay half the
mortgage, each borrower is responsible for the whole amount.

• So, if one person doesn't pay, the lender will expect the other to make up the difference.

• If payments are missed, it would affect both borrowers credit rating.

• If you have any doubt about your friend’s ability to pay the mortgage, either now or in the future, you should
think twice about buying a property with them..

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