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WIth Friends and Family
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As would-be first time buyers become increasingly squeezed out of the market place by rising house prices and competition from investors in the towns and cities, increasingly young house purchasers are turning to the 'bank of mom and dad' to help with getting them onto the property ladder and not paying rent.
This is becoming an increasingly popular route to home ownership and even as a means to expanding the family's property 'portfolio' as an investment in property for the future.
Although at first this may appear as a convenient and trusted means of clubbing together to increasing borrowing potential, buying with friends and family can
have it's pitfalls, such as the greater willingness to rely on 'verbal' agreements that are not worth the paper their written on and relying on the goodwill of parties to adhere to past agreements.
Bay street banks and lenders are very aware of this increasingly popular arrangement for purchasing property and many now offer special mortgages to cater for this need specifically. Although it may appear a little strange and even untrusting at first to have supplementary legal documentation between family, it should be considered prudent that, if the purchase of property is viewed as an investment opportunity, then it should be treated with the respect you would give any other business agreement. In fact, we have been writing contract agreements between family for hundreds of years through wills and testimonies.
To have the future roles and responsibilities of each party formalized into a 'Deed of Trust' and Cohabitation Agreement protects yourself against any potential future loss as a result of any family disagreements and help in the fluid handling of any future resale of property as per previously agreed terms.
In short, buying with friends and family is an excellent way to help each other to invest in property and achieve home ownership with people you have been friends with for years or grown up with.
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