Buyingblock -Homes

Steps forward

Finding a potential co-buyer to invest with:
Your first step is to identify a suitable co-buying partner with whom you can invest to by your ideal property together. Be open and forthcoming with information about you, your position to buy, your objectives as these are all key to enable you to find the right person that satisfies all your requirements and be a compatible house mate. Developing trust is crucial for the relationship to work, so providing character references, proof of sound credit history and performing a criminal record check are wise steps to take. Such checks cost approximately 10pound and take only a few weeks to process.Take your time at this stage - think of the exercise as more of a 'business venture' and that it is a bonus if your personalities are compatible as this is likely to increase the chances of developing a friendship and co-habiting with minimal problems. Take the time to view some properties as this will give an indication about your requirements and what you are prepared to compromise on.

What property can we afford?
It would obviously be quite useful to know how much funds can be raised between the co-buyer's combined salaries and deposits (if any are available). By visiting an independent mortgage broker or financial advisor is a good place to start to get advice on what amount is available to you, repayment obligations and various other terms and conditions of the joint mortgage he need to be aware of. From here you can revisit the property market to see what type of property are available for the amount you can raise and get a better indication that all items on your wish lists can be accommodated for, and if not what can be negotiated. One of the advantages of co-buying is that you have double or more the time and energy resources available for looking at property to ensure the perfect home opportunity does not pass you by.

What is a 'Declaration of Trust'?
Before the perfect home is found, you and your fellow co-buyers should secure each of your positions with regard to your co-buying arrangement. This can be done in part with a 'Declaration of Trust' or otherwise known as a 'Deed of Trust'. This will record each of the co-buyers shares in the property stating individual deposit contributions, how mortgage repayments each month are arranged to be split - whether it is equally or in favour of one party paying a greater share of the mortgage repayments each month. The agreement will also state how monies will be divided on the eventual resale of the property and how any increase in the value of the property will be shared according to each co-buyers payment contributions. The agreement will detail what happens if one party decides to sell their share so you may choose to have a minimum period for co-habiting before any eventual resale of the property takes place and have provisions in place in the event of one co-buyer becoming unemployed and unable to meet their part of the mortgage repayments for a period of time. The agreement should be formalised with a solicitor so that any dispute can be resolved amicably with minimal hassle.
Another important agreement to formalise between co-buyers before proceeding with buying a home is a 'Cohabitation Agreement'. This essentially sets out the rules of engagement for day-to-day living, rights and obligations of each co-buyer and importantly the arrangement for termination of the agreement and terms of the eventual resale of property and division of monies.

Making a Joint Mortgage Application:
This can be done easily once the difficult part of deciding on your new home by contacting an independent mortgage broker or financial adviser who is likely to have a wider selection of joint mortgages to suit your needs than simply approaching several of the high street banks. Be advised there are two legal forms of joint ownership which are 'tenants in common' and 'beneficial joint tenants'. 'Tenants in common' can sell their share either alive or through a will and is more appropriate for co-buyers buying a home together where they do not intend to live as a 'couple' and have their share transferred to the other partner in the event of unfortunate circumstances resulting in death to one of the parties. For 't enants in common' it is even more appropriate to draft and formalise a 'Declaration of Trust' detailing what happens to the property in the event of such circumstances. Once the right lender, terms and conditions has been identified for you and your fellow co-buyers, you can receive an 'Agreement in Principle' from the lender which confirms that they will make a specified sum of money available to you subject to a structural survey, valuation, verification of income and identity and any other conditions they require.