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With the cost of living and the price of housing rising all the time, many young people are now opting for the choice of buying a home with friends.

While this seems like a great idea, and in many cases it is, it’s important to weigh up the pros and cons of such a situation before diving in. Here, we’ll look into some of the most important things to know before buying a house with friends.



Pooled Resources 

With two or more of you pooling together, you’ll likely be able to afford a better property in a better area than trying to purchase alone. It also means that you’ll be able to afford a larger down payment.

Lenders will tend to look at a combined income and average rating between everyone on the mortgage when looking at credit, which means you’ll be more likely to meet the necessary requirements of your credit score. In turn, this will make it easier for you to get a mortgage.

Splitting Costs

The cost of living can come down dramatically when it’s coming from multiple pay checks. From utility bills to repair costs, your invoice will seem significantly less daunting when you remember you only need to personally cover a portion of it.

A Stepping Stone to Independence 

Having the safety net of another person to live with can be a comfort to first-time buyers. It means there’s another person with you to look over and understand legal terms and paperwork, as well as someone to just share the experience with, and have as company.

With that in mind, be prepared for your relationship to change. As much as you may love your friend, being around and living with them 24/7 will inevitably change your dynamic in some way.



All Credit Scores Count

Credit scores can be a double-edged sword when buying a house with friends. It’s true that averaging the two can be beneficial in the beginning as mentioned above, but if your friend falls behind on payments, your credit score will decline alongside theirs.

Should it get to the point of legal action, all parties will be reported to the credit agencies, regardless of whether only one of you is behind on payments.

This also means that if you or your friend has issues with their credit, your mortgage terms could be negatively impacted, even if the others’ credit score is high.

If One Party Wants to Leave 

There’s a lot of fine print involved in home ownership, particularly when it’s being split between multiple parties. In the instance that one party wants to back out of the mortgage, you’ll need to either sell or refinance the property (essentially, get a new mortgage). This will put the mortgage under your name rather than a shared one.

It’s a good idea to have a written agreement in place of what both/all parties agree will happen, should one of you want to bow out on your shared mortgage.

Getting Other Loans 

For all parties, your debt-to-income ratio may appear higher than it is to lenders, which could make it more difficult for you to apply for other loans.

Although you’ll be splitting the mortgage payments, lenders will see each of you as responsible for the entire mortgage, so it could appear to them that you’re not earning enough for what you’re spending on your home.

This is usually avoided by couples living together by simply applying for loans together, but when it comes to those sharing a house platonically, it’s unlikely you’ll want each other’s names on your other loans, separate to the shared mortgage.


Get More Advice with Howells Solicitors 

For expert advice on sharing a mortgage or buying property with friends, get in touch with one of our expert solicitors or have a look at our conveyancing services today.

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