Fool News: First Time Buyers Rush In With Strangers

Mortgages and Home

17 October 2007 | 0 Comments

First time buyers are throwing caution to the wind and rushing onto the property ladder with people they barely know, unaware of the potential consequences should things go awry.

First time buyers are throwing caution to the wind and rushing onto the property ladder with people they barely know, unaware of the potential consequences should things go awry.Research by Skipton Building Society has revealed that one in five first time buyers who have taken out a mortgage with someone other than a spouse has done so with a person they have known for less than a year.Rising house prices and a tight budget appear to be the primary drive forcing people to take this leap of financial faith. The majority of people (56%) who took out a mortgage with a relative stranger said they did it because the arrangement made financial sense, with a quarter stating they were unable to buy alone.More than a fifth (22%) described themselves as `desperate to get on the property ladder' - indeed a quarter of co-mortgagers are so desperate they are willing to buy a property with somebody they had never previously lived with. However, when things go wrong, the price of falling out with your mortgage partner can be extremely high. A quarter of mortgages which came to a premature end were because the borrowers split up or fell out. This left nearly one in 10 people (9%) completely out of pocket, with 16% only receiving their share of the property's original value, even if it had gone up in price.The emotional cost is just as significant. Over a third (39%) of buyers whose joint mortgage ended felt that they had made the decision too prematurely. Hindsight it seems is a wonderful thing, as more than a quarter (28%) said that they should have spent more time getting to know the person, with a quarter expressing that they should have lived with the person before tying themselves to such a big financial commitment.More: How To Move In With A Partner | Top Tips For Cohabiters

Comments

Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.