Want to get on the property ladder but don’t have the funds? Ask a mate to come in with you, suggests LUCY BOON
WITH the average rental price for Henley and the surrounding area a whopping £1,500pcm, it clearly makes more financial sense to buy at the moment (see story on page 70).
It’s the challenge of coming up with the deposit — and getting a mortgage in the first place — that trips up most would-be-buyers.
But most mortgage providers are happy to offer shared mortgages. Lenders including Barclays, Woolwich, Lloyds and NatWest allow up to four friends to get a mortgage together.
The share each owns depends on how much they can afford. Just make sure you do your homework and take note of the following tips first...
Top 10 tips for buying with friends
1. Rent first with the person/people you have chosen to buy with for at least six months, to be certain you will get on.
2. All parties should get a credit report, as any black marks on it may jeopardise mortgage approval.
3. Create a Declaration of Trust (which will cost about £350) in which you agree how everything is shared, including ownership, bills and legal fees.
4. If you are putting in unequal deposits, work out the proportion of the property each deposit equates to — and agree how proceeds will be split.
5. Buy as “tenants in common”. This means each buyer can own a different percentage of the property and dispose of their share independently.
6. Set up a joint bank account for the mortgage (most lenders require this) and other joint expenses.
7. Compare mortgage rates. One bank might offer you a lower interest rate, but charge high fees, and vice versa.
8. Keep records of all official documents in a file.
9. Keep an inventory of ownership and shared contents in the home.
10. Make a will.