The LO Down - Cobuying

Posted by Tifany Pledger on September 08 2022

With home prices reaching astronomical levels, it can be difficult for many to qualify to purchase the home of their dreams.  However, there is an option referred to as Co-buying that is gaining some popularity. Co-buying is basically a group of 2 or more people buying a home together, in order to make the loan more affordable.  This could be siblings, close relatives or friends, or even business partners. There are a few potential ways to do this.


  1. All of the borrowers could plan to live in the home and be equally responsible for the mortgage payment and ownership responsibilities.
  2. Some of the borrowers could plan to live in the home, and the others will use their portion as a vacation home, or are simply co-signing for loan approval purposes. 
  3. None of the borrowers plan to live in the home, in which case, all borrowers must meet standard Investment Property guidelines. 

Though co-buying does create some extra steps for the lender as far as processing and compliance are concerned, for the borrowers purchasing the home, the process is mostly the same as any other mortgage loan. 

But, there are some important things to think about before you start looking at houses. 

When purchasing a home, most loan programs require a down payment.  The group would need to agree on where those down payment funds will be coming from. Though all borrowers are financially obligated on the mortgage loan, you typically can specify a percentage of ownership on the deed, if you want to. 

The borrowers also need to work out who will be responsible for things like -  paying the monthly mortgage and utility bills on time, and taking care of home maintenance needs. And keep in mind, if for some reason one of the borrowers decides to move out of the home, they are still legally obligated on the mortgage loan.  Selling their one-half or one-third ownership of the home isn’t really an option.  

Though co-buying does provide a way to make the home buying process more affordable, it’s a good idea to figure out all the details before signing the paperwork for one of the biggest financial and credit obligations in your life.  That’s all for this week. Thanks for reading, and for more content like this, check out!

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Tags: Mortgage, REALTORS



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