Is Buying Home with Friend a Good Idea? Know Advantages and Disadvantages

Renting a house with a friend or friends is a good idea as you can split every type of cost and none of you will have any financial difficulties. If you are staying in a rented house in Hyderabad or any other metropolitans, the rent is quite high. Sharing the house with roommates will save you money. But, owning a house is definitely something different. And if you get a close friend with whom you can buy a house that will be wonderful. If you are not planning to get married soon, you can buy a house with your friends. Later, you can sell it to the friend and you will get good value.

Now, is it really a good idea to buy a house in collaboration? You should know the ways the advantages and disadvantages of buying a house with your friend and then decide what you really want to do.

Benefits of Buying House with Friend:

There are some financial benefits of buying a house with a friend, but you should go into the deal with a friend who is the closest to you and you can trust h/her completely.

1. Easy Home Loan Qualification:

A person who has recently bought a house know how difficult it has become to get a mortgage loan. If you two sign the mortgage application, the odds of approval will increase as the mortgage lender will approve on the basis of your combined income and he also checks the average credit scores of both.

2. Share All General Expenses:

As soon as you own a property together, every duty and responsibilities will be shared. Both of you are responsible for every repair, utilities, and maintenance of your house. If you buy a house alone, you are solely responsible for extra maintenance costs. But, you can share the financial burden while buying it with a friend.

3. Mortgage Interest Deduction:

You have to pay interest on the mortgage and that is deductible on taxes. If you have a high income, you will be more benefit from the deduction. Now, if you have low to moderate income, you can’t access this facility. You can avail it if you and your friend’s combined income are in the count.

Disadvantages of Buying House with Friend:

Yes, these are certain benefits you get while buying a house with your friend. But, there are many disadvantages too. And sometimes, these appear as serious problems-

1. Difficult to Move:

Disagreement is natural between owners. When you find it difficult to get along, you can easily move out of the rental house, but that is not so easy when you own the house.

2. Credit Score Damages:

You are responsible for paying half of the mortgage loans and other utilities. What to do if your co-owner is not so? Even if he is responsible, any financial crisis can make you both helpless.

3. Not Qualify on Other Loans:

A big house loan on the joint credit reports of both of you may stop you to get another loan, like an educational loan or auto loan.

Now, it is up to you which way you will choose. Think wisely and do the best thing for you.

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