Need advice of Buying half of a shared house

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  jason101 on 02/05/2018 - 07:31

  I did something similar but different years ago - things may have changed so I'd be interested to see what others think.

  You should get a valuation (by a valuer not an appraisal by a real estate agent) to give a basis to begin price negotiations. You will probably have to pay stamp duty, you will probably forfeit any first home owner incentive (if such a scheme is available in your state), the bank may require you and your friend to be jointly and severally liable for your mortgage (ie if you default they have to pay), unless of course you can offer up other property as security and mortgage that 2nd or 3rd home to allow you to effectively pay your friend in cash. You may be required to be jointly and severally liable for his or her mortgage which may also need to be discharged and then remortgaged after your name is added to the title, unless of course they are planning to use your money to completely discharge their mortgage. Different banks may not wish to play the game of 1st and 2nd registered mortgages on the title so you may have to use the same bank if using the property as security over either mortgage or the bank may insist you just the share the same 1st mortgage - in all cases you'd both have to have sufficient income to cover the mortgage payments in their entirety, which your friend may have the capacity to do (if he or she already owns the home) but you may not have (depending of course on if your friend wants to use your money to pay out or pay down the existing mortgage). It sounds like a simple concept but unless you have cash money or can obtain cash money from another source or external mortgage I think its going to be harder than you think.

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  JimmyF on 02/05/2018 - 09:41

  I am considering of buying half of the house

  When things so pear-shaped or you want to move out or they want to move out or you want to start a family (or are you banging this 'friend' you share with?) anyhow, you'll have half a house. you can't just 'sell' your half of the house to anyone, as there aren't many buyers out there for half a house, your friend would have to agree on the buyer as they'll be living there etc

  Your friend most likely won't be able to buy you out, hence why they want to offload half the loan/house to you now.

  You might not be able to afford to buy them out.

  Basically its not a WISE thing to do for living, as you could be stuck with half a house that you can't offload, get paid out. Your 'friend' might want to move and force you to buy them out, or even sell the place.

  Keep renting……. But a unit elsewhere if you want to own something.

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    st1ngynoob on 02/05/2018 - 11:52

    Thanks for the advise. My friend can afford to pay off her loan but would like to make it more comfortable if both of us share it.

    We are both straight female.

    • 

      ziaxk87 on 02/05/2018 - 19:38

      you still didn't answer are you hanging her 😉

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      JimmyF on 02/05/2018 - 19:40

      but would like to make it more comfortable if both of us share it

      And how do they think that if you own half it will do that?

      I fail to see the plus for them or even you here if they can afford it?

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  barbarella on 02/05/2018 - 09:46

  +1

  Good friendships often fall apart ;(
  ATM it might work well while 'one is the owner/boss' but not with two owners with conflicting ideas…
  You can stay living with her but use your $s to buy your own investment property and rent it out - maybe in another city/town where the prices are more affordable for you.

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  zonra on 02/05/2018 - 10:09

  +1

  Basically its not a WISE thing to do

  Because

  you could be stuck with half a house that you can't offload, get paid out.

  This is pretty much it.
  Friends do stop being friends at some points.

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  myusername on 02/05/2018 - 10:20

  +2

  queue Cyndi Lauper - Money Changes Everything

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  st1ngynoob on 02/05/2018 - 11:53

  Thank you for all your inputs.

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  ziaxk87 on 02/05/2018 - 19:40

  +1

  if you can afford 400k.. but a property in qld as you don't want to live in it. you can still pay rent to her as usual…
  better don't buy any property.. the market is slowing down..