Is Now the Time to Buy? How About Together?

An article in the Wall Street Journal today got me thinking about home ownership again.  The rent vs. buy debate is a common one, but is now the right time to buy?  With bargain homes going on sale, mortgage rates at an all time low, and numerous tax incentives, if you are employed and have the money to pay your monthly rent, should that be going into a mortgage instead?

The major obstacle, however, is pulling together enough cash for the down payment, and this is where the concept of joint tenancy enters the picture.  While this has been the way for couples (whether married or life partners) to hold property, this concept has recently gained popularity as a way for friends to pool together their resources and purchase a home.  The arrangement, however, should NOT be undertaken lightly.  No matter how close your friendship might be, there should be a formal contract stipulating, among other things:

the proportionate amount of each person’s financial interest in the property; division of maintenance costs; who pays the bills and when; methods of dealing with a partner who fails to pay at the required time; how the household will operate and detailed procedures for the equitable dissolution of the partnership. (Source: NY Times)

Other things to consider are what happens if one person has to relocate or marry.

It sounds like a lot of work,  but depending on your share of the mortgage, you might actually be paying less than renting.  And paying a mortgage is essentially a way of forcing you to save, building equity through your home.

Have you thought about buying instead of renting?  Is joint tenancy too much, especially for a young professional who doesn’t want to be tied down to a home so early?  Share your thoughts with us in the comments section!

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