By Lisa Prevost | The New York Times
Young adults stuck in expensive rentals may be tempted to pool resources with friends to buy a shared home.
This type of arrangement can potentially cut buyers’ individual expenses, while providing them with a potential equity gain and a mortgage interest tax deduction. But these ventures can also end badly if buyers assume that friendship alone will see them through any future difficulty.
Before applying for a mortgage, the co-borrowers should fully reveal their income, debt and credit status to each other, said Mike Venable, a senior vice president and head of underwriting for retail bank operations at TD Bank. “It definitely needs to be someone you really trust,” he said.
