Our Conveyancing Solicitors in Colchester, Essex, provide tips for when you're buying a property with a friend and how to keep yourself protected.
During the fun and excitement that comes with buying a house with a friend, it's vital to keep yourself protected. In this blog, we will provide you with tips on how to buy a house with a friend the smart way.
Try Renting First!
Try renting first to test run living with each other. No matter how well you know each other, it can always be an adjustment living with someone. Once, you know you can live in harmony with each other, you can look into a mortgage with your best friend.
Be Open About Money
Make sure you openly discuss money with each other, no financials can be a secret in ownership. Although sometimes it can be uncomfortable, it's best, to be honest. Your finances can affect your mortgage and the type of property that you're both able to buy.
Draw up Legal Documents
Once you've planned the 'ins and outs' of buying a house together, draw up documents using a conveyancing solicitor. Legal documents such as a cohabitation agreement and a deed of trust can set out how the property ownership is divided. It can also map out what should happen under certain circumstances.
Create a Joint Bank Account
At this point, it is worth considering setting up a joint bank account for the mortgage payments. Direct debits can be set up every month into the joint bank account, so you are both equally covering the expenses.
Tenants in Common
When you're buying a house with your friend, you may want to be tenants in common rather than joint tenants, the main difference between these is that half of your property would be passed on to your next of kin, rather than automatically being transferred to your friend.
There are many advantages to buying a home with a friend. It is a financial benefit having someone else to help pay for the deposit, mortgage and household bills and can ease the financial pressure off in comparison of buying a property alone. You may also find many new social benefits living with a close friend. But ultimately it can be a great way to get onto the property ladder, and if the property increases in value over the years, it may be an investment in a future property.
If you would like some legal advice about conveyancing or would like to arrange a free, no-obligation phone consultation with one of our conveyancing solicitors in Colchester, Essex, please contact us.