Should you buy with someone else?
If you can’t afford to buy your own home, you might be thinking about buying a house or apartment with a friend or relative. It’s known as ‘co-borrowing’ and it’s a small but growing trend.
Things to consider in relation to co-borrowing |
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The key to success is having a strong relationship with the other person, an equal 50/50 share in the property, and a legally-binding contract—even if you are ‘going in’ with a family member.
This contract needs to cover things like:
- Maintenance
- Payment for damage
- Capital gains liability
A contract is also essential because if one person defaults on a loan payment, the other person is often liable. And the default can be innocuous: it could come from someone losing a job or their income from investments, or becoming too ill to work. A contract also becomes critical if there is a breakdown in the partnership and one of the parties decides to opt out.
So seek legal advice and make sure you’ve got all the key elements covered if you’re thinking of co-borrowing.
