How many people can go in on a mortgage?

[msdmoney]

Originally Posted by karen_in_nh_2012

Congrats on paying off all your debt, that's great at your age!

Just one comment that's not really a financial comment: a 29-year-old guy with 3 roommates? Sounds more like a college/grad school apartment. Not saying it would really BE that, but for dating etc. I think women (or men for that matter) might find it odd to date people in their late 20s/early 30s who have lots of roommates.

I know a lot of people that have roomates post college. Until you are really ready to settle down with someone, it's not out of the ordinary at all.

[md21722]

It just sounds like a headache. If one person backs out, then you may have to refinance your loan just to get their name off and hope there's enough equity to give them their cut otherwise you'll have to find another way to come up with the cash. And do you really want to share your home with strangers who may have some unscrupulous friends who turn it into a meth house when you're on vacation or steal your things? I think it makes more sense to rent and not have the house than get tangled in that complicated mess.

[TechGromit]

Originally Posted by abqpsychlist

Renting is ok but it's potential investment money lost, so I thought an alternative would be to go in on a house with, let's say, 3 friends.

Repeat after me. "Buying a house is NOT an investment!". This is how the housing bubble started people buying houses they considered investments. A house is place to live, not an investment. If you consider a house an investment, then it's the absolutely worse investment you can possibly make. It doesn't cost you 6% of your profits to sell stock, houses do. (Realtor Commissions). It's OK to buy a house, just don't consider it an investment, cause it's not.

Originally Posted by abqpsychlist

If one person backs out, the amount they paid down and monthly remains their share in the equity if the house is sold later.

This has disaster written all over it and it would require a pretty complicated contract between the 4 of you. Ok, lets say you all pitch in a buy a house and live there for 3 years. Then one friend meets a girl and wants to move out, get married and get a house with his next new wife. The three of you decide to cover his payment and will pay him out when you sell the house at a later date. When the one friend goes to apply for a loan with his new wife, the mortgage company will see he has an outstanding loan with another company, this outstanding liability could prevent him from qualifying for another loan. He would want you to refinance to get his name off the mortgage. Refinancing isn't a cheap process, even assuming the house increase in value, a refinance is going to cost at least 5k. Your "investment" is going to have a major set back, it takes two to three years to break even after a refinance, it's unlikely the house would have much equity at this point if any, after all you have to pay off the closing costs from the original mortgage.

[md21722]

Others have mentioned agreements with an attorney. Even if you have one, you may have to go to court to get that enforced if someone doesn't want to hold up their end of the agreement. Some people would rather take the chance that a judge will decide in their favor despite what the agreement says. Just a headache every step of the way.