Co-Buying Mortgages in UK

Want to live together and get on the property ladder? – then Co-Buying may be an option.

Co-Buying is when individuals legally group together and buy a property between 2, 3, 4 or more people known as ‘Co-Buyers’. Simple as that! Well it is simple as long as you are happy living with the other co-owners. So it may be worth renting together to see if you can live together first. Even if you are best friends the other’s habits can be unbearable day in day out. On the other hand buying a house can be stressful! So it helps if you can share the workload with your other co-buyers.

Financial benefits are the main reasons to Co-Buy: it can increase your financial muscle by buying together for example by increasing the deposit. Big lenders like Yorkshire Building Society, HSBC and Northern Rock take account of at least the two highest incomes. The costs and repayments are split between 2 or more Co-Buyers. Many people have always lived in a busy house and simply don’t want to live alone, if they can’t afford to buy on their own co-buying gives them another option.

Tips for Co Buying Mortgages

1. Draw up a legal contract.
2. Spell out how the property will be divided when you sell
3. Insure each contributor to the mortgage for ill health or critical illness
4. Exit strategies need to be agreed for all eventualities and set valuation methods for break –up if one busy out another owner is the price the average of 3 estate agents valuations
5. Own the business as Tenants in Common so each person owns their share outright.
6. Check co-buyers can pay as you are each ‘jointly and severally’ responsible.
7. Consider having your own solicitor

See also: Joint Mortgages advantages and disadvantages