Spreading the load

By Georgina Oldfield

Many people have dreams of getting onto the property ladder but may not have the funds to do it.

While this may be stopping you from buying, you might not have to rule it out altogether. Have you ever thought about buying property with family or friends?

This means you could share the mortgage and the monthly repayments which could get you onto the property market faster.

Ownership

When buying property with a friend or family member the ownership you will enter into is called Tenants in Common where both parties have shares in the property. The advantage of being in this type of agreement means that each property owner owns the property and can have equal or unequal shares in the property. It also means each owner can have their say in their will on who they wish to give their share to if they died, which can also go to the surviving owner if that is what their wish is in their will.

In this case it’s important that each property owner’s will is up to date so it’s not left to the surviving person to deal with.

Potential risks

One of the biggest financial risks when you are in a joint agreement is that you are still liable for the mortgage, so if one of you is struggling to pay, the other has to cover the mortgage repayments. The other thing to note is when you have a mortgage with someone else your credit score will be linked with the other person so any financial neglect can affect the other party. If you’re looking at buying a property with a friend or family member, it’s important to put your relationship to the side and ask yourself questions such as: have they been in debt, are they reliable with money and how much can you trust them? If you’ve had an open conversation, ticked all the boxes and decide you both are happy, then it’s time to bring in financial advisors so everything is out on the table and you both know what each other’s expectations are.

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