Co-Buying a Home: Partnerships, Risks, and Protections
Co-buying can make homeownership accessible when it would not be possible alone. But it introduces legal and relationship complexities that require careful planning upfront.
Types of Co-Ownership
Joint tenancy means equal ownership with right of survivorship — if one owner dies, the other gets their share automatically. Tenancy in common allows unequal ownership shares and each owner can leave their share to anyone in their will. Which you choose has significant legal and tax implications. Consult a real estate attorney before deciding.
The Co-Ownership Agreement
This is non-negotiable. Before you buy, put a written agreement in place that covers: who pays what percentage of the mortgage, taxes, and maintenance. What happens if one person wants to sell and the other does not. What happens if one person cannot make their payments. How you will handle major repair decisions. How you will split profit or loss at sale. This agreement should be drafted or reviewed by an attorney.
Mortgage Implications
Both borrowers' credit scores and debts affect qualification. The lender uses the lower of the two credit scores for pricing. Both borrowers are 100% liable for the full mortgage — if your co-buyer stops paying, you owe the entire amount. This is not a 50/50 liability split in the lender's eyes.
Key Takeaways
- ✓Get a written co-ownership agreement before purchasing — this is essential
- ✓Both buyers are 100% liable for the full mortgage, regardless of ownership split
- ✓The lower credit score determines your interest rate
- ✓Have a plan for buyout, sale, or default before you close
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