When you buy property with someone other than your spouse

 Things to consider when you buy property with others 

When you buy a property with someone other than your spouse, or partner don't forget to consider all the facets. Buying a new property on your own can be difficult which is why most owners look for alternative ways to buy property. One of these ways is to consider buying a property with your spouse or friend. Buying property with your friend can be both beneficial and risky. You should consider both aspects. We have enlisted a few things that you should consider before making a deal. You can also ask our expert lawyers in Calgary they will guide you in the right way.

What things you should consider 

First of all, you should choose a reliable partner.  Choose a trustworthy person who you can trust and he should be financially capable of repaying the share of the loan.

Secondly, you should have a co-ownership agreement in place. The agreement paper includes things such as how long you intend to keep the property, what will happen if one of you wants to leave at that time how the disputes will be resolved, and finally who will pay the maintenance costs. In such situations, we would recommend seeking the advice of a real estate lawyer Calgary. You need to consider the goal for the property. Whether you want to rent it out or be an owner-occupier. Aside from this, you should also consider the fact of what will happen if your partner fails to repay the loan.

Do we have to split 50/50

Now, you have the choice to choose the property in any proportion. Mostly couples or husband and wife buy property together they do this as joint tenants. Which means they have 100% rights to the property together. In case one of them dies 100% of ownership property rights will revert to the other. When buying with friends real estate lawyer Calgary recommends buying as

common tenants. Which allows you to choose any portion of the ownership and that portion can be transferred or sold.

For instance,  Nick and joe want to purchase a property together worth $430,000. Nick is earning significantly more compared to Joe and his deposit is $20,000 whereas joe's deposit is only $10,000. Now here as Nick is contributing more than joe so, they can decide to structure the ownership of the property as 70% to Nick and 30% to joe.

Property Share Home loans 

This is a type of share home loan which enables the friends to keep their finances separate. This option enables you to keep an eye on your loan and pay the loan according to your capacity. You should properly read the terms and conditions of your particular loan as if you are on a fixed rate you might get a penalty in case you pay more than the prescribed rate.

If my friend refuses to pay the mortgage, will it affect me?

When you are co-signed onto a single loan together and your friend pays his share you might be faced with a difficult situation. With a home share loan, you will be able to separate finances to a certain extent, the lender will ask you to provide a guarantee of each other's loan. In case your friend fails to pay the loan you might have to sell your property to clear your friend's loan.