When the time comes to move out of rental housing and find your own property, it can be tough to manage 100% of the costs when before you may have been splitting them two or more ways before. Due to recent skyrocketing home prices and new mortgage rules being implemented in 2018, many first time buyers are finding it hard to get approved for a mortgage. A creative new way that homebuyers are overcoming this challenge is by purchasing real estate with a family member or friend.
If you are considering co-purchasing a property with someone, don’t limit yourself to a romantic partner or spouse. It can often be less of a risk or more beneficial to partner with a sibling, parent, aunt, uncle, or co-worker in a home purchase. The most important factor in this decision is trust, as you should partner with someone who you know will be able to pay their part of the mortgage on time. Remember, if your partner can’t pay their part for any reason, it may fall onto you to come up with the cash. Due to the potential risks involved with this kind of arrangement, always have a lawyer create an official agreement so that your money and your relationship is protected.
Besides the main benefit of being more likely to qualify for a mortgage, there are other benefits to co-purchasing a property. With two incomes, it will be much easier for you to save for a down-payment, which is also considered for mortgage qualification. If you and your partner are looking to purchase a home in a high price area, saving a down payment can become almost unmanageable on a single income when you have other payments to make such as rent. Another benefit is the size of the property you will be able to afford. Again, that increased income helps you save more money for a more expensive home and puts you in a better position on the property ladder.
The first step in this smart decision is picking a reliable partner. If you don’t have anyone in mind, check out a real estate matchmaker that can match you with a reliable homebuyer who has similar interests. If you do have someone to partner with, take a look at new mortgage arrangements that are specifically made for a co-purchasing deal. Now more than ever it is easy to purchase a home with a family member or friend!
If you have any questions or want to know how you can start the partnership mortgage process, contact me today