Has anyone ever co-bought a house?

[NogginBoink]

Originally posted by: Evadman
One person should buy the house, the other rent from the first. Anything else is just asking for trouble.

Bingo!

If you buy it together and he stops paying his half of the mortgage, your credit report gets damaged.

There's lots of downside and little upside to going halves on a house like this. I totally agree with Spidey.

 

[cpals]

Originally posted by: dullard
I didn't see this thread earlier (I don't post on weekends). I would be a little cautious doing this if I were you. A few things caught my eye that I'd like to highlight.

[*]It appears that you haven't lived with this friend yet. It can work out quite well to live with a good friend, but I bet in the majority of cases, it won't. I can't think of a single person I knew in college who moved in with a best friend, and who didn't hate each other at the end. But those people who moved in with a complete stranger had a great time and a new friend at the end. Often you enjoy being with your friend but not spending 100% of your time with him. I would personally try renting a place for a few months with him (sometimes in college towns you can get a 3 month lease) before diving into a major committment like a home.

[*]Buying a home comes with upfront costs. Minimally you'll need to pay for the title inspection (~$500), bank fees (~$500ish), termite inspection ($100), and other fees which depend on house price (say 1%-1.5% total). When it is all said and done, you can often have $3-5k worth of closing costs for an inexpensive house. Then you have house maintenance, property taxes, house insurance, etc to consider. But you do save on rent and you can get a potential tax deduction. In order for the savings to overcome the expenses, you have to live there for a while. A rule of thumb is 5 years. If you spend less than 5 years in a house, you often lose money. You said you wanted to "live there...a couple years". The end result is that for such a short time period, you very well may lose money when compared to renting an equivalent house. Of course if housing prices skyrocket this might not be true. But likely it will be.

[*]You mentioned in your other thread a lot of problems. Banks won't like this. You are at a new job with high credit card debt. That screams high interest rate mortage (if you can get one at all).

If you really want to do this, I'd suggest following Evadman's advice. Have your friend buy it, and sign a legal contract where you rent from him. If you want to share a part of the costs and potential profits of the house, build that into your rent agreement, or sign a seperate agreement.

Great advice from everyone thanks... how would the rent from him and still share the house work? What would be the difference since I would be legally held into contract with him both ways.

Also, isn't a main thing of buying a house to get good credit? Renting will not do this for me, right? I've lived at home my whole life and with my new job and life I'm ready to move out... just not sure which way to go. Thanks.

Edit: The thought of moving out into a home right away sounds ideal, but I just want to make sure it's the most wise decision. The renting option is looking good, but I'm not sure how my friend would think of it since he told me that he cannot afford to build the house by himself, which is why he talked to me... would a bank loan him the money to build if there was a contract between me and him to rent?

Also, I'm not exactly sure about the future and I could possibly be married in a year or so and my g/f has already made it clear she doesn't want to be living with another guy.

 

[DougK62]

Build a duplex together. It'd work out the best.

 

[preslove]

If you're going to get married soon it would be unwise to spend lots of $ and take on a lot of debt while buying a very hard asset. Live humbly and save money for a starter with you're gf, dude.

 

[cpals]

Originally posted by: preslove
If you're going to get married soon it would be unwise to spend lots of $ and take on a lot of debt while buying a very hard asset. Live humbly and save money for a starter with you're gf, dude.

Well, I'm not living with my g/f right now and wouldn't until we're married.

 

[Vic]

I will say only this. As a mortgage banker, it is illegal for me to discriminate on the basis of the borrowers' marital statuses (or lack thereof). If unmarried co-applicants choose to buy a home together, that is their business.
I find these comments about "Two gay guys buying a home, seriously this is a bad idea" or "wait til you find a wife" to be extremely offensive.

 

[Budmantom]

So what happens in 6 months when your friend is getting married and needs to get out of this house so him and his wife can buy a new place, will you guys split the cost of selling this place and how will you feel losing money and your home.



Tom

 

[dirtboy]

I have done it with my friend. We wrote a contract beforehand. We also agreed that if either one of us were to get married that the spouse could live there and each person has to give the other a 1 year notice if they want to leave, to give the other time to either move out or buy the place.