Congratulations! You've saved up and can now afford the keys to a beautiful new home. The only caveat is that you can only truly afford this home with a partner, and that partner cannot be a romantic one. The question is, are you still taking the keys?
“Potentially yes, but it depends on the person," said Kyle Williams, who lives in Detroit. “Homes are expensive, but the potential risk of losing a relationship is also expensive."
“I would not," said Jon Desjardins. "I couldn't handle having a platonic partner knowing that I could hear the sounds of chatter and stuff of them, whoever they bring over.”
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A recent national mortgage insurance corporation report shows that over 30% of Gen Z adults disagree with Jon. Those 18 to 24-year-olds are open to co-purchasing of a home, even if it means living with a friend, sibling or parent.
“The utilities, the expenses, the monthly bills, that is a high expense for a lot of people," said real estate attorney Brian Hommel. “If they can split that burden, share the cost, it makes sense for those individuals."
But he said purchasing a home always involves risks, especially when the relationship between platonic co-owners takes a turn for the worst.
“We have had the unfortunate situation where both co-owners are on the mortgage and one has left the country, not willing to take on that financial responsibility,” Hommel said.
Perhaps that's where the unconditional, unbreakable love of a parent comes into play. Real estate agent Darrin Roberts said higher interest rates are pushing parents to help their kids.
“I often see parents helping kids buy their homes by simply pulling out of their 401K or simply doing a gift of funds and then a couple of months later those buyers are applying for a mortgage to pay their parents back because cash right now is whats helping a lot of young buyers get their offers accepted," Roberts said.
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Whether a co-ownership is between a child and parents, siblings, or friends, Hommel advises establishing clear guidelines before buying the home.
“You can use a cohabitation agreement that can be tailored specifically to the co-owners, maybe splitting expenses 50-50, maybe someone is paying the mortgage, someone is paying the bills," Hommel said.
The risks are always there, but so is the help.
“Whether with a family member helping, or buying with a sibling, a lot of lenders have programs out there that allow you to have grants that will help with down payment assistance. But as the professional, I do find it most advantageous to put money into real estate," Roberts said.
This story was originally published by Evan Sery with the Scripps News Group in Detroit.
