Buying a house with a friend can be a great way to enter the property market, but it’s important to understand the risks and responsibilities involved. In this blog, we’ll explore some common questions and concerns that buyers might have when getting a mortgage in Ireland to buy a house with a friend.
How does joint ownership work?
When you buy a property with a friend, you will both own the property jointly. This means that you will both have an equal share in the property and will be responsible for any maintenance and repairs. You will also both be liable for the mortgage payments, regardless of who is living in the property.
How can I get mortgage approval with a friend?
To get mortgage approval with a friend, you will need to apply jointly for a mortgage. A mortgage broker will be able to research the market for you and find you a lender that meets your particular requirements. You will both need to provide information about your income, employment status, and credit history. The lender will assess your joint affordability based on your combined income and expenses, as well as any outstanding debts or financial commitments.
What are the risks of buying a property with a friend?
There are several risks associated with buying a property with a friend. One of the main risks is that one party may want to sell their share of the property before the other party is ready to sell. This can create a difficult situation, as the remaining party may not be able to afford to buy out their friend’s share.
Another risk is that one party may not be able to keep up with their share of the mortgage payments. This can lead to missed payments and arrears, which can damage both parties’ credit scores and put the property at risk of repossession.
What can I do to protect myself when buying a property with a friend?
To protect yourself when buying a property with a friend, it’s important to have a legally binding agreement in place. This agreement should outline each party’s responsibilities and obligations, as well as what will happen in the event of a dispute or if one party wants to sell their share of the property. It’s recommended that you seek legal advice when drawing up this agreement.
You should also consider taking out life insurance and critical illness cover to protect both parties in the event of one party becoming seriously ill or passing away.
Lastly, it’s important to choose your friend carefully and make sure that you have a good understanding of their financial situation and ability to make mortgage payments. It’s also a good idea to have an open and honest conversation about your expectations and goals for the property.
In conclusion, buying a property with a friend can be a great way to enter the property market, but
it’s important to understand the risks and responsibilities involved. To protect yourself, make sure you have a legally binding agreement in place, consider taking out insurance, and choose your friend carefully.
If you have any questions or concerns about getting a mortgage in Ireland to buy a house with a friend, one of our mortgage consultants can help guide you through the process and provide expert advice.