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Buying a house between two friends

  • 05-07-2009 10:56am
    #1
    Sgt Slaughter
    Closed Accounts Posts: 153 ✭✭


    Anyone done this, im looking at buying my first house, as is a friend of mine and weve decided to look into at least the possibility that we might buy together. Im wondering what are the pitfalls involved.

    Especially i suppose the number one problem is what happens if one person either loses their job and cant buy their part of the mortgage or decides to sell and the other doesnt want to.

    I know wed have to get a lawyer involved and it could be messy, but what do people think of this as a whole and has anyone else on here bought a house between friends?

    If the party decides to sell and the other decides to buy him out how the hell does that work. Especially if the property has increased or decreased in value since you bought it. Does the guy whose buying his mate go to the bank and take out another mortgage at the original cost and pay his mate back what he invested in it, or do you take it at the market price and either the buyer or seller gets screwed by the increase/decrease in property value


Comments

  • #2
    JuliusCaesar
    Registered Users, Registered Users 2 Posts: 4,885 ✭✭✭JuliusCaesar


    Lots of information here

    As far as house values going up or downi is concerned, you selling will just have to take the hit/profit like anyone else, your share will go up or down with the market. If three of you buy a house for 300K with a 30% share each, ie 100K, then your share goes up or down with the market. You always buy/sell at the current market value. Not what it cost when you bought it.

    If you buy your friend/s out, you take out a new mortgage to clear the old one, pay off the other/s their equity in the house (if any) and buy the rest. Hopefully you'll have some equity yourself to help this, but it's not guaranteed. Anyway, the link above probably explains it more clearly than I can.


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