Should I buy a house with my parents?

Spread the love

Getting a foot on the property ladder for first time buyers is becoming increasingly difficult. Saving up for the deposit alone is hard work and can take years. A result of this is that many young people are turning to their parents for assistance. This has become known as the Bank of Mum and Dad.

Should I buy with my parents?

Whilst this might be a tempting thought, there are some serious considerations to ensure this is the right way forward.

Image credit

One consideration is that a first-time buyer is eligible for stamp duty relief of up to £300,000 on a property worth no more than £500,000 but if your parents already own a property and you plan to buy jointly, that relief is no longer available. As your parents would effectively be buying a second home, there would be a stamp duty penalty that could add a lot to the price of the property.

What if there is a disagreement in the family? If either you or your parents default on the payments, the other party becomes liable for the money. Any financial difficulties could lead to family upsets and emotional distress.

Another solution to this issue is the joint borrower sole proprietor mortgage. This process involves parents making financial contributions to the mortgage payments without being a co-owner of the property. The benefit of this is that they can help you financially until you are in a better position and you could be able to purchase a better home as a result. For more information on joint borrower sole proprietor mortgages, visit Sam Conveyancing, advisors on joint borrower sole proprietor mortgages.

Image credit

Other ways in which parents can help include assisting with the deposit whether as a loan or gift.

The writer of this article, currently manages his own blog moment for life and spread happiness and is managing to do well by mixing online marketing and traditional marketing practices into one.

Leave a Reply

Your email address will not be published. Required fields are marked *