A pre-purchase agreement is one agreed upon by co-buyers in a joint mortgage.The agreement stipulates what should happen in different scenarios such as buyers wanting to sell their share of the property or recover their mortgage deposit.
Joint mortgages are becoming more popular as a way to get on to the property ladder. Finding a Homebae is great but a pre-purchase agreement just gives you more protection should things go wrong.
We walk you through some real life scenarios where a pre-purchase agreement could be vital and should be in place.
You and some friends are buying a flat together and you are putting down much more of the deposit.You want reasurrances you can get your money back if anything goes wrong.
Yes, you should have a pre-purchase agreement to make sure you get the money back.
You and your boyfriend are buying a house together and your parents have loaned you the money but want the house as security, the lender does not agree to this. Your parents want guarantees that you will pay them their money back do you you need a pre-purchase agreement?
Yes, you need a pre-purchase agreement which sets out how the money will be paid back.
My girlfriend and I are buying a townhouse together. I have much more money than him and will pay the most of the mortgage deposit. We expect to do a lot of work to the house which I am going to finance whilst my partner sets up her company. We expect the property to rise in price and we will then sell it. We are going to take the title jointly. I am going to meet the mortgage payments. Should I have a pre-purchase agreement and is there anything else to consider?
Yes, a pre-purchase agreement is an absolute must in your circumstances and there should also be a discussion about how the property title is to be held(if equally or not).
I am buying a first house with my friends . We are going to buy the property with deposit money we have built up together. We have been renting for a couple of years already. We earn about the same, contribute equally to a joint account and intend to pay the mortgage to the property equally as we have done with our rent. Is a pre-purchase agreement necessary?
A pre-purchase agreement may be less significant in this scenario, but would still be the preferred option so that there is an agreed timescale for sale or transfer of the property if the relationship came to an end.
A pre-purchase agreement is always great back up and you should seek independent advice first.