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:

Buying with a friend of family member - make an agreement & put it down on paper:

Buying with friends or family member can work out well – as long as you both have the same expectations and you get your solicitors to put an agreement together in writing.

At some stage, one person will probably want to move out or sell up, so you should discuss what would happen in such a situation.

Agreeing a minimum period, such as 3 or 5 years, where both parties agree you won't sell without the agreement of the other, is worth considering.

• Legal agreements can be drawn up to give the remaining friend 'first option' to buy out the share at market
value

• Each owner should agree to take out and maintain an accident, sickness and unemployment insurance policy
to the value of their share of the mortgage & you should also consider adding serious illness cover to your
mortgage protection policy.

• Discuss what happens in the event of death.

• Decide what happens if one person misses mortgage payments.

PROS of buying with a friend or family member:

• You can afford to get on the property ladder

• You can share the costs of buying (such as legal fees), furnishing and decorating the property.

• You'll share the ongoing costs such as mortgage payments, bills etc

• You’ll own a share of a property instead of renting and paying ‘dead money’.

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