Buying a home in Balham with friends, the ups and downs
Buying a home in Balham can be quite expensive, as it typical with properties in London, in order to afford a mortgage on a Balham property you may need to consider buying it with a family member or a friend. As with everything there are advantages and disadvantages to this, and you should make yourself aware of these before you make any decisions on buying property with someone else. You and the person you intend to buy property with should sit down and discuss the following:• How are you going to finance the purchase of a home?• How long do you foresee yourselves living together?• What happens if one of you wanted to move out and/or sell their half of the house?• What happens if one of you meet someone and want them to move in?• What type of property do you want and in what type of area?• Do you both agree that you want all the necessary legal documentations in place? This includes things like a co-habitation agreement and/or a declaration of trust. The advantages to joint ownership:• You share the costs of everything that is associated with the property with your investment partner, you can become a property owner by paying half of what most people need to. Here are some of the things you can save on:o The deposit that you need to pay in order to secure the property o The mortgage, which includes the monthly repayment’s as well as any fees you incur from setting the mortgage up.o Any additional fees for things like surveyors, solicitors fees and stamp duty. o Any initial repairs, modifications, DIY or decorating that needs doing when you first move in, including the furniture that will be used in the shared room like the living room, carpets and curtains etc. Further to this any on-going maintenance that needs doing on the house will be paid for by both of you. o Monthly bills like the electricity, water, gas, television licence, internet, telephone etc. • Whether you own a property by yourself or with someone else, it is still considered an investment and you will be able to use that investment later on in life when you eventually decide to sell the property. The disadvantages to joint ownership:• It can often be difficult to keep a track of the finances without feeling awkward, as this is your friend you perhaps ordinarily wouldn’t worry about who pays for what, but when it comes to buying property it is essential that you are fully aware of how much has been paid out any by who. Balancing your friendship and your investment can be a tricky one. • Before you even consider a mortgage you need to agree to be open about finances and to discuss them, not to be embarrassed by the inability to pay the rent or bills, but so that together you can sort a way out to pay it. Remember, one of you pay’s late or defaults completely, it reflects on both of your credit scores. Put a rainy day fund in place that you both pay into in case this should happen. • When you own your home yourself you can make the decision when to sell, but if you own a property with someone else you may feel trapped into staying there, this may then lead you to having to rent out your room and become a landlord (as a last resort).