Co-Buying - Unconventional, But A Great Solution

It may not be an ideal solution, but for some the unconventional alternative of co-buying a property and sharing the cost, sometimes with a stranger, is the only solution currently available to get onto the property ladder. But it is essential to know the legal implications of entering in to such a deal. There should be no difference between buying with a stranger rather than buying with a friend, or friends, as the state of affairs have to be agreed upfront with all parties concerned being aware of the terms and conditions from the outset. Remember that both parties are jointly and severally responsible for the mortgage and it is a legally binding contract. The only way to get out of the legal obligation is to sell the property or transfer the mortgage into a single name. Neither of these options are quick and the second one may not be possible.

If you are thinking about entering into a co-buying relationship you may find the following advice useful. It is advisable to draw up a contract, either with a solicitor or you can do it yourselves. Discuss in detail what you are looking to gain from the arrangement, how long you are looking to own the property for and what your plans for the future are. When starting the house buying process it is important to agree on how the costs; legal fees, mortgage arrangement fees and survey cost will be split, this will hopefully reduce stress and save time in the long run. You will also need a Declaration, or Deed of Trust to co-buy. The document is signed when contracts are exchanged. It sets out the legal rights on the property; the percentage each buyer owns on the property and how the costs of ownership are split and how the relationship will end.

When starting your search for a home using an online property search engine can be effective and time efficient way of finding the types of property that you'd be interested in and ultimately viewing.

Keep in mind your budget from the outset, and of course, remember to consult with a mortgage broker or lender to discover how much you can afford to borrow and repay, they'll also be able to find you the best possible mortgage deal that suits your needs. When discussing your budget you'll need to be clear if they'll be a deposit involved and how much you and your co-buyers can afford to contribute. If there is no deposit, you'll still be able to buy, but will need to seek out a 100% mortgage deal, or being 'shared buyers', some mortgage lenders now offer specific 'multiple buyers' or 'shared ownership' mortgages.

Co-buying is becoming increasingly popular for young first-time buyers eager to get on the property ladder but is also being used by private investors looking to start a buy-to-let portfolio and overseas buyers looking for a holiday home abroad.

James Quinton is a writer based in the UK. He has had articles published worldwide. Compare mortgage rates online.