4 Vital Questions to Answer When Buying A Home With Family

There is a long and stressful process you need to go through before you can finally decide on buying a home. Purchasing a property is never easy, but worth the wait and money you are going to spend for it. Also, it could be more convenient and easier for you to buy one with the help of your family.

If you purchase a home with any of your family members, make it a point to discuss everything clearly first. You need to ensure that you are on the same page and that you understand things thoroughly. Additionally, the more you and your potential partner earn and have good credit history, the more you get a chance of obtaining a mortgage deal, such as a fixed rate home loan. Simply gather and submit all the requirements needed, and you are set to get a loan.

Here are some of the important questions you need to answer when buying a home with family:

Who will pay ongoing expenses?

It is best if you talk to one another first about your ongoing homeownership expenses. In case you still have to pay for property taxes, repairs, mortgage payments, utilities, insurance premiums, and other expenses, you have to determine who will pay for these. All you have to do is to divide the expenses in your co-ownership agreement. It’s up to you how you are going to allocate the costs, as long as you all agree with it.

Who owns what percentage?

One of the most significant things that you need to know when buying a property with family is your percentage share. You need to clarify what percentage you will own if ever one of you decides to sell your interest or later dies. This is a crucial factor to consider, so you need to discuss it beforehand.

How will you hold the title?

The title is the most important document when purchasing a house. You have to be sure how each of you will share this deed. Apparently, you have two choices in sharing title with family— tenants in common (TIC) and joint tenants with right of survivorship (JTWROS). TIC means that if one party were to pass away, his or her share would go to whoever was specified in his or her will instead of being passed on to the other owner of the property. On the other hand, JTWROS means that you will all have a fair share of everything, whatever happens to you or your partner.

What if one co-owner later wants out?

Getting out of the deal isn’t simple especially when you are talking about co-owning a property. In fact, no party wants to sell interest to any third party. But this might going to happen if one does not want to continue the deal anymore. However, you can have a provision in your co-ownership agreement that states a selling co-owner gives the person who is staying a right of first refusal to buy the interest.

It might be less of a burden to buy a property with family, but it also requires a lot of thinking and decision making. You need to answer these questions mentioned above when planning to purchase a house so that everything will be clear. Also, these will help you a lot in making your homeownership a smooth process.