Whether it’s in the country, on a lake, in the burbs or smack dab downtown, owning a home is part of the American dream, but for many people buying a house in today’s market is a challenge.
According to Bankrate, 54% of people who would like to own a home say they can’t afford it.
More than 12 million Americans spend at least half of their paycheck on rent. And new data shows housing prices in 99% of U.S. counties are unaffordable for the average wage earner.
High inflation, increased cost of living and stagnant wages are making homeownership more challenging. Now people across the country are taking a different approach to home ownership.
First-time home buyers are turning to friends to make their first big purchase. A new Zillow report shows 14% of people co-bought a house with a friend.
Experts say co-buying a home can work, but there’s a lot to consider before making the move.
American Financing explains the many pros to this kind of investment.
First, it will make it easier to afford the home and qualify for a mortgage.
Second, all the related monthly expenses can be split. And owning a home means building equity.
But with all that reward comes some risk, and there are things to consider.
First, both sides should be transparent with things such as income and debt. Check each other’s credit report and credit score.
Next, have a lawyer write up a document detailing the ownership agreement.
Finally, make sure there is a clear plan in place when it’s time to sell or if someone wants to leave early.
Experts also warn that, unlike renting, it is not easy to walk away from a mortgage. There should be a clear understanding on both sides of the commitment involved in the investment.