Buying a home with a friend?

You have decided to buy a home, do you buy by yourself or with a friend?  You know how much you can qualify for, if you buy with a friend (maybe a boyfriend/girlfriend) or a partner, will you be able to buy more?  You're not married, should you buy with someone else?

As home prices start to go up again, this becomes more common.  There are definite advantages to buying with someone else.  You can share expenses, you have someone else to help if there is an emergency or maybe some major maintenance items.  You will be able to qualify for a bigger home, maybe a single family home instead of a town home.  Because you share expenses, you may be able to save some money every month for emergencies.

There are also some things you need to be aware of.  When you rent a home or apartment, you sign a lease typically for a year.  At the end of the year, you can renew or move on.  With a home, you usually get a 30 year mortgage.  You can't just walk away from the mortgage.  If you find that you can't live with that person, you will need to sell the home or see if the other person can qualify by themselves for the house.  If one of you gets a job transfer, you may also have to sell the home.  What if one of you decides they are getting married to someone else?

One suggestion is to talk to a real estate lawyer before you buy a home.  Have a property agreement drawn up to protect yourself.  Possibly see if you can buy on your own, but have someone rent from you so you are still splitting expenses but only one of you is on the mortgage.

Make sure you talk about all the possibilities with the person you are buying the home with.  Have a plan in place in case you need to sell or maybe refinance the home.  If you have a plan in place before you buy, you will be better protected in case something does happen. 

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants – EmailWebsite

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Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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