Mortgage adviser Jeremy Andrews, from Key Mortgages, said he dealt with people wanting to buy in partnership several times a year.
"There are some advantages such as being able to combine everybody's deposit together to get the best possible interest rates, and combining everybody's incomes together to get the highest approval figure based on income servicing."
He said the case highlighted the main downside - what would happen when one of the parties wanted to get out of the joint ownership, such as to buy a different property.
"If they are jointly and severally liable for the loan, which is typically higher than a single or couple's income alone could have allowed, this could be a dealbreaker without selling the property.
"There needs to be a clear understanding of the future implications at that point, before entering into such [an] agreement, and we always recommend each party seeks independent legal advice on this."
He said sometimes people would own a house as tenants in common, which gave them an agreed and specified percentage of the ownership.
"If the property increases in value over time, then each party receives their respective percentage increase in value each when the time comes to sell - hopefully for an overall profit.
"There are also downsides to this type of arrangement, such as if one or more of the co-borrowers wish to retain ownership of the property, and then based on the income they have at the time, can they buy out the other exiting parties share of existing mortgage - plus typically accumulated equity on top of that."
Read the full article here:
https://www.stuff.co.nz/home-property/360937845/buying-house-friends-or-family-watch-out
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