In its Global Housing and Mortgage Outlook report for 2018, Fitch examined 22 countries and found that house prices were expected to rise in 19 of them. So, wherever you are in the world, the housing market is a difficult – and increasingly more expensive – place to be if you don’t have extensive resources. The obvious choice for many people is to buy a home with a family member to try and overcome the issue of housing that is unaffordable – but is that a good idea?
No – the cons
- If you’re not on particularly good terms with that person this won’t help. You might be desperate to be a home owner but it’s just not worth it if the result is going to be joint ownership with someone you have a very difficult relationship with. Whether they live with you or not, they will have control over half of your property so it’s important that there is an existing sound relationship beforehand if you’re considering buying together.
- If you plan to rely on a casual arrangement. For example, if the mortgage is to be taken out in their name but you’ll be making the mortgage payments. According to personal finance experts at Solution Loans, even if you’re buying a property with a sibling or someone you’re incredibly close to it’s not a good idea without going through the formal ownership processes. You’ll have no idea how to proceed if someone wants to change the situation and it could overshadow your future relationship.
- If there is no other option. You always have more options than you think you do. So, if you’re feeling forced into buying with a family member because you just don’t think you’ll ever get the chance to do it another way, it might be worth taking a step back and waiting until it feels like a more positive choice. Remember that one useful option to involve a family member without actually having to share a home with them is to look into guarantor loans, where another family member simply guarantees that you will make the home loan repayments.
Yes – the pros
- If you’re both on the same page about property ownership. Perhaps you’re both single, looking to live in the same city and keen to own the same type of property too. Factors like this will make buying and owning together a much simpler matter because you’re both focused on the same outcome.
- When you are in fairly equal financial positions. It’s always easier to share a financial arrangement if both parties have similar situations. So, you can avoid issues that often arise with shared ownership where one party is struggling with their share of the deposit or mortgage payments and the other is not.
- You know that you can resolve problems between you. If you already have a well established relationship with this family member and know that the two of you can work through any issues that arise without fireworks then buying a property with them won’t involve too many emotional risks.
- You’re taking on equal responsibilities. Relationships between family members often mean that one person might take pity on another and offer to bear more of a financial burden or pay more of the costs. This rarely works out in practice because people and situations change. It’s far better to take on equal responsibilities and costs so that there can be no accusations of inequality in the future.
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