New Home Owners And Snagging Forum
Home Owners => Mortgages and Insurance => Topic started by: The Prophet on July 11, 2011, 02:40:03 pm
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Housing Minister Grant Shapps wants people to join forces to get on the housing ladder. He has appealed to lenders to start offering mortgages for friends and family so they can jointly own a home and share the mortgage.
However this is not for the faint hearted as even the best of friends can fall out. If a person stops paying his or her share of the mortgage the rest are still liable for the mortgage, even when someone has moved out. It is important to make sure there is a written agreement for an 'exit strategy' in the event that one of the mortgagees wants out.
It is unlikely that this type of arrangement will do anything to stimulate the housing market.
Even when this type of arrangement was popular, mortgages involving three or more people only made up less than 1% of the total mortgage market.
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Sharing a mortgage with friend(s) is a recipe for disaster in my opinion.
Sooner or later circumstances will change and there will be disagreements.
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I agree that this can be a disaster. Even though, it would be easier to pay the bills, there is always going to be that feeling that you own it. As a result, they will never do anything right. I know that purchasing is getting tougher, but clean up all your debt and save, save, save. Eventually you will be in a place all by yourself and proud of your accomplishment!
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That is very good advice LTB.
Friends can end up falling out over shared-ownership and mortgages.
Especially if one of them loses their job and cant make their share of the mortgage payment.