A Friend, A Home, A Mortgage

There comes a time over the course of any renter’s time in a particular piece of real estate where it seems that the payments are providing a great stream of income for a landlord but for you. Indeed, as incomes begin to creep up and the ability to at least a portion of a mortgage becomes a possibility, more and more renters are beginning to feel that way and enlist a friend to make home ownership dreams happen.

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There is a time in life where particular income levels can outgrow renting but perhaps be too small to take on a full mortgage. As a way to either bridge that gap or land a home above a single person’s income level, friends are beginning to team up in greater numbers to operate as co-owners of a home. As any , these deals require a bit of care and, more importantly, asking some tough questions of yourself and your prospective co-owner.

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Why Do You Think Co-Ownership Is For You?
Everyone that ponders co-ownership needs to be sure about why it seems a good idea. Problems can arise when you and your friend are not on the same page about the benefits you hope to see through co-ownership and that discord can harm the search for an actual home. Are you looking for for the ? Are you looking to upgrade your surroundings by sharing the mortgage burden? Are you hoping to equity and the home in five years? These types of motivations are common and the only way to be sure that you and your prospective co-owner are on the same page is to go ahead and ask them. It may seem silly, but step has to come before ever going to a showing or looking at an house as your target will change based on what you are trying to accomplish.

What Happens If You Get That Job Offer?
Any plan needs contingencies and getting involved a co-owner is no . What happens if you get the job offer of a lifetime in a state? The discussion needs to take about the possible options that face both of you if one of you decides to leave town. There are a of options should that occur.

Of course, you can both go your separate ways and the house but sometimes ruins your goal of building equity if that is what you set out to do. Another option is to buy out your friend and pursue else as a new co-owner. No matter what your decision, it should be made before ever getting involved in the transaction to ensure a seamless transition should the time come?

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How Much Do I Trust You?
it may seem crass to ask in regards to how you feel about your prospective housemate, the fact of the matter remains that a significant portion of your financial future is tied up person. If you have doubts about whether your friend has the ability to make regular payments, that should send up a red flag and end the discussion there.

Often, the loans given in these types of situations make both parties entirely liable for the entirety of the loan. That means if your friend skips town without paying, your bank can hold you solely liable for the entire balance of the loan, not the you planned on paying. Be sure of who you get involved with for co-ownership as it could save you financial headaches in the future.


Co-ownership can be a great way to solve the problem of wasting money on rent and wanting to equity without the income level to do so. However, before ever traveling down that path, you need to ask you and your prospective housemate these questions to make sure that you aren’t getting in over your head. Stay careful and you will ultimately find the right living situation for you.

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