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Private Finance, the leading independent mortgage broker, today shares five key tips for people looking to remortgage with a friend to buy a property. With an increasing number of first-time buyers exploring options to co-borrow, Private Finance emphasises the importance of being thoroughly informed and understanding potential pitfalls in the process.
Ensure formal agreements are in place from the outset. Expert legal advice is vital, especially as co-applicants may not have the formal commitment that exists in family or marital relationships. This agreement should cover various scenarios, such as disagreements or unforeseen changes in personal circumstances.
Open and honest conversations about finances are essential when buying a property with a friend. Be transparent about all aspects of your finances and be aware that taking out a mortgage is also linked to your credit profile. Openness is key to building trust and avoiding potential conflicts.
Explore mortgage options that are tailored to your specific situation. For fellow borrowers in their twenties and thirties, choosing a longer-term fixed rate product may not be the best choice. Seek advice from an independent mortgage broker to find the best options on the market.
Setting up a joint account for joint spending minimises the risk of disputes and ensures joint responsibility. Many find this practise effective in managing bills and joint spending.
Include a comprehensive inventory of shared items in your legal agreement before you finalise the purchase. This proactive step will help avoid conflict if one of the parties wants to move out.By following these tips, individuals navigating co-borrower mortgages for joint debtors can make informed decisions and promote a successful property settlement. Contact Private Finance today if you need expert advice on co-borrower mortgages.