Buying House with Friends

[dinger128]

Two friends and myself have decided to by a house. None of us know nothing about mortgages or house buying, however, we thought that the easiest way would be to contribute 1/3 to legal costs (including contract with solicitor), a large deposit each and to have a mortgage each, i.e. each of take a mortgage out for a 1/3 of the house.

Is this possible? The taking a mortgage worth a 1/3 of the property I mean. Thanks.

[Mrs_Pegasus]

Your best bet would be to contact an independant financial advisor. There are some companies who specialise in your type of mortgage. I think you will have 1 mortgage but in 3 names.

Try and find an IFA which someone else has used and recommends. There should be no fee for the consultation and they should be up front with what each mortgage company will pay in commission to them.

[Nether Edge]

You MUST have a water-tight professionally-drawn Trust Deed binding each party to agreed arrangements and defining when and how a sale can be permitted. See a solicitor and DON'T try this yourself.

[EverClean]

I would skip an IFA and see a mortgage adviser - these are the specialists in this area. As Mr P says try to find one that a friend or family member recommends. A mortgage in 3 names is failry commonplace nowadays and the solicitors will sort out the paperwork for a small fee.

You will also need to consider life assurance to cover the other two if something happened to one of you. This will need to be written in trust but again specialist advice in this area can be sought.

[WendyS]

I am sure a three-way mortgage is possible but be very sure you have reviewed this option carefully between yourseles before going ahead. What happens if one of you decides to marry and wants to take out their share of the equity towards a propery of their own? What happens if one of you wants to move a boyfriend in and how will this affect the dynamics of your arrangement? etc, etc.

You must get a watertight legal agreement drawn up, otherwise what looks like a easier way to get yourselves onto the housing ladder could end in tears.

[dinger128]

We've already decided to have a solicitor write up a formal contract for us...Regarding when one of us moves out, we've all agreed to retain our 1/3 of the mortgage for investment purposes.