"Buying a home jointly with three others is doable"

Raey said:
I wonder how those people fared.
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A very interesting point. I think that there is a thread on it.

If you stayed out of the market and bought at the bottom, you would probably be better off.
If you bought on the shoulder of the market with a cheap tracker, you are way ahead of a renter who stayed out of the market.
If you bought at the top of the market with a non-tracker, you are probably behind a renter.

Brendan
 
Brendan Burgess said:
If I have €20k and borrow €80k and buy a house jointly, I am reducing the risk.
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I think where we disagree is what we consider acceptable risk.

I agree that this option is less financial risk (at face value) but I would happily take higher negative equity on a house I own solely over lower negative equity on a house I own jointly.

I expect any contractual agreement entered into would not be easily enforced if things went south significantly (recession, change of individual circumstances, property market downturn etc)

For me, the legal and financial quagmire that could happen is an unacceptable trade off for the relatively lower financial risk (at face value)
 
Raey said:
I agree that this option is less financial risk (at face value) but I would happily take higher negative equity on a house I own solely over lower negative equity on a house I own jointly.
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Fair point.

Personally, I would prefer to live in a larger house closer to where I work than to buy a smaller house with a long commute.

But each to their own.

Brendan
 
Brendan Burgess said:
If I have €20k and borrow €80k and buy a house jointly, I am reducing the risk.
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But you're not borrowing €80,000. If it's the 4-person deal mentioned earlier, you're borrowing €320,000 jointly with three other people. If the other three can't pay / disappear, you're on the hook for the full €320,000; not €80,000.

At best I'd describe it as changing the risk; not reducing it.
 
Dave Vanian said:
If the other three can't pay / disappear, you're on the hook for the full €320,000; not €80,000.
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While this is correct, I think people are overstressing this jointly and severally liable.

Sure, we could be at the peak of the market. House prices might fall 50% and irresponsible joint owners might head off and leave you holding the baby.

At the end of the day, if you can't pay and you are in deep negative equity, you go bankrupt.

But if you borrow €200k with a €20k deposit, you could be in deep negative equity anyway.

I appreciate it's a different type of risk but you can mitigate it to some extent by choosing your partners.

Brendan
 
Brendan Burgess said:
While this is correct, I think people are overstressing this jointly and severally liable.

Sure, we could be at the peak of the market. House prices might fall 50% and irresponsible joint owners might head off and leave you holding the baby.

At the end of the day, if you can't pay and you are in deep negative equity, you go bankrupt.

But if you borrow €200k with a €20k deposit, you could be in deep negative equity anyway.

I appreciate it's a different type of risk but you can mitigate it to some extent by choosing your partners.

Brendan
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I think you're taking a very financially-focussed view on this Brendan. The stress and anxiety that would come from being left on the hook would be massive. The stress and anxiety of feeling you might be left on the hook when your com-mortgagee is looking shaky as to whether they might go is not trivial.

But to be fair, the thread title is 'Buying a home jointly with three others is doable', not that it's a good idea.
 
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