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First-time buyer mortgages



How to buy a home with someone else

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With house prices at record levels, buying a home with your partner, family member or friend is a great way to make owning property more affordable.

It can also be incredibly exciting. That feeling of true independence, maybe moving from your parents’ place or the shared house that’s too crowded and too messy for anyone who’s not a student.

However, before you take the plunge you should bear a few things in mind.

If you’re buying a home with a partner or spouse, the mortgage provider will consider both of your salaries, meaning you can get a larger loan than if you were on your own.

When you purchase a property you have the option to purchase as ‘joint tenants’ or ‘tenants in common’ (Usually, when purchases are made with friends or family they opt for the latter). This can have implications for circumstances such as the line of inheritance should one of you die, so you should always speak to a legal adviser to understand your options.

Some people already own their own property before they chose to live with a partner. If you’d like to give them a stake in your home, you can sign a ‘transfer of ownership’, which will add their name to the title deeds. However, if you have an ongoing mortgage this may make the process more complicated: the lender would have to agree to the transfer first. It might be preferable to wait and then remortgage together with a new lender.

Couples aren’t the only people who buy homes with each other.

Up to four people can own a house at any one time, which means even for a relatively small amount you can get on the property ladder. Let’s say you and three friends want to buy a house. You can share the ownership through a ‘tenancy in common’ agreement – and it’s up to you how the ownership is divided.

You can all be named on the mortgage, though it’s wise to take advice from an independent mortgage broker like Charles Cameron & Associates before you do so. As is the case when you take out a mortgage with a partner, you’ll all be jointly liable for the repayments. So if one of your number can’t pay, the rest will have to cover the cost.

With several owners, things can get complicated. That’s why you should take legal advice separately and sign a ‘declaration of trust’. This sets out what happens if one of you wants to leave the agreement, borrow against the property or sell the home.

None of these factors should stop you from buying a property with other people – the advantages far outweigh any drawbacks.

So if buying with someone else is of interest, then seek advice from independent experts such as our advisors here at Charles Cameron & Associates. We will help provide the advice you need to step onto the property ladder together.

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