Alternative Homebuying Trends

The current state of the housing market presents challenges to first-time homebuyers struggling to save for down payment or manage high monthly payments. In this regard, alternative homebuying trends could help more people achieve homeownership, including the concept of purchasing a house with someone, even if it’s not a romantic partner. For instance, younger generations, parents, and children may consider this route. The trend could start to emerge for homeowners to co-purchase with a family member, friend or non-romantic partner. While it is a less common practice, it could be a launchpad for people to get into homeownership so they can build equity. However, when purchasing property with a non-marital partner, there are risks to be aware of. Emotional toll is one of the aspects to consider as homeownership is very emotional. Purchasing a house with a friend can be hard for some people to compartmentalize friendship and business. It is advisable to assess the compatibility of lifestyles, including how they handle finances and their level of cleanliness. Furthermore, it can lead to resentment when one person is putting more into things like renovations or home maintenance, or even day-to-day tasks like cleaning. Consequently, one of the smartest things someone can do when considering joint homeownership is to engage an attorney and come up with an agreement where the parties determine how they would handle a sale or buyout. Building a business partnership around the property is another critical step, and choosing the partner wisely is essential. Working with skilled and knowledgeable professionals such as a real estate agent and a mortgage broker is also key. There are quite a few nuances and differences when purchasing real estate jointly versus as a married couple or individual. For instance, when married couples apply for a home loan, there is one application that looks at both parties’ credit score, income, and debt. When applying as two unmarried individuals, there are two applications looking at the same criteria, but the flow of information is not as fluid. Depending on the disparity, mortgage brokers need to talk to both parties or only the applicant, which could affect the chances of getting approved for the mortgage.