Friends loan

Buy a home with a friend

Many first-time buyers’ way onto the housing ladder is to buy one with someone else, preferably a partner, sibling or a good friend. A home is a big investment, and dividing the purchase between more people makes it easier to become a homeowner. You will then have more than one income on which to base your mortgage offer and a larger down payment to use for your home purchase.

Regardless of who you choose to buy a home with, the entire home buying journey – from the pre-qualification letter to the housewarming party – is the same.

An exit strategy and a joint financial plan are a good idea

Have a sales plan – an exit strategy. Friends who buy a home together, especially, often have a limited time period for their cohabitation. It is therefore particularly important to have clear agreements for the purchase, use and sale.

When it comes to finances, it’s easier to split the home mortgage and divide costs such as electricity, insurance, joint debt, renovation costs and unforeseen costs.

Remember that when you own your own home, there are also unforeseen expenses. You should have a savings buffer set aside for unexpected expenses (and then we’re not talking about surprise parties). It’s a good idea to think about what insurance you need and, for example, create a joint expense account.