# Buying a Home with Friends: What You Need to Know By Opendoor Editorial Team | 2019-06-12 > There are a few things you should know consider before jointly signing on the dotted line. ## Key Takeaways # Buying a Home with Friends: What You Need to Know Rising home prices and [mortgage rates hovering near 6%](https://www.bankrate.com/mortgages/mortgage-rates-forecast/) have pushed many aspiring homeowners to get creative. One increasingly popular solution: teaming up with a friend to buy a house together. Co-buying can boost your purchasing power and help you build equity sooner, but it also comes with legal, financial, and relationship considerations that are worth understanding before you sign anything. This guide covers how the process works, what ownership structures to consider, and how to protect both your investment and your friendship. [See Homes Near You](#) ## Can you buy a house with a friend Yes, you can buy a house with a friend. Lenders allow multiple people on a single mortgage, and co-buying has become a popular path to homeownership, with the [first-time buyer median age now 40](https://www.nerdwallet.com/mortgages/studies/fthb-affordability-q32025) as prices and rates remain high. By pooling resources, friends can qualify for larger loans, make bigger down payments, and share ongoing costs. The arrangement works best with a written co-ownership agreement in place before closing. This document spells out each person's financial responsibilities, ownership percentage, and what happens if one person wants out. Without it, even strong friendships can run into trouble when money gets complicated. ### Co-borrower vs co-signer Two terms come up often when buying with someone else, and they mean very different things. A co-borrower shares ownership of the home and equal responsibility for the mortgage. Both names go on the title, and both people build equity over time. A co-signer, on the other hand, helps you qualify for the loan but doesn't own any part of the property. The co-signer is on the hook if you stop paying, yet they have no claim to the house. | **Role** | **Owns the home?** | **Responsible for mortgage?** | **On the title?** | | Co-borrower | Yes | Yes | Yes | | Co-signer | No | Yes, if borrower defaults | No | When friends buy together, they're typically co-borrowers. ## How many people can be on a mortgage Conventional loans generally allow up to four co-borrowers. So yes, three or four friends can purchase a home together, as long as everyone qualifies individually. Each person goes through the same verification process: credit checks, income documentation, and asset review. [The lender](https://www.opendoor.com/articles/finding-your-best-mortgage-lender) looks at the group as a whole to determine approval. [FHA](https://www.opendoor.com/articles/what-is-an-fha-loan-and-how-does-it-work) and VA loans may have different rules, so checking with your lender early helps avoid surprises. ## What to consider before buying a home with friends A few honest conversations upfront can save a lot of headaches later. Co-buying works best when everyone enters with clear expectations. ### Your relationship and communication style How do you and your friend handle disagreements? Homeownership brings unexpected challenges, from a broken water heater to differing opinions on renovations. At some point, your friendship will face financial stress. Think about how you've navigated money conversations in the past. If you've never discussed finances openly, now is the time to start. ### Financial readiness and credit scores Lenders review all co-borrowers' credit, income, and debt-to-income ratios. Here's the catch: the lowest credit score among co-buyers often affects the loan terms and [interest rate](https://www.opendoor.com/articles/impact-of-interest-rates-on-home-ownership). Before applying, both parties benefit from gathering key information: - **Credit scores:** Check where you each stand and address any issues first - **Debt-to-income ratios:** Calculate how much of your income goes toward existing debt - **Down payment contributions:** Decide how you'll split the upfront cost - **Emergency reserves:** Make sure you both have savings for unexpected repairs ### Property type and location What kind of home fits both of your lifestyles? A single-family home works well if you're comfortable sharing common spaces. A duplex offers separate living areas while still splitting costs, which appeals to friends who want more privacy. Location matters too. Consider proximity to work, lifestyle preferences, and how long you each plan to stay in the area. ### Long-term goals and exit plans This conversation might feel uncomfortable, yet it's one of the most important. How long do you plan to own together? What happens if one person gets married, relocates for work, or faces financial hardship? Discussing exit scenarios before you buy, and documenting your agreements, protects both the friendship and the investment. ## Pros and cons of buying a house with a friend Like any major financial decision, co-buying comes with trade-offs. ### Pros of co-buying a home Pooling resources often means accessing better properties or neighborhoods than you could afford alone. You split the down payment — the [median is currently $62,000](https://www.bankrate.com/mortgages/average-down-payment/) — [closing costs](https://www.opendoor.com/articles/how-much-are-closing-costs-for-seller), mortgage payments, and ongoing maintenance. Combined incomes may help you meet lender requirements more easily, and you can start [building equity](https://www.opendoor.com/articles/briefs/5-home-ownership-benefits) sooner rather than waiting years to save on your own. ### Cons of co-buying a home Financial disagreements or lifestyle differences can strain even strong relationships. Both parties are responsible for the full mortgage, so if one person stops paying, the other covers it or risks default. Selling or buying out a co-owner requires agreement, appraisals, and legal steps. And major decisions about the property require consensus from all owners. ## Joint tenancy vs tenants in common How you hold the title affects what happens to your ownership share, especially if circumstances change or one owner passes away. ### What is joint tenancy Joint tenancy means equal ownership shares with a right of survivorship. If one owner passes away, their share automatically transfers to the surviving owner. This structure works well for friends who contribute equally and want simplicity. ### What is tenants in common Tenants in common allows owners to hold unequal shares based on their contributions. Each owner can pass their share to heirs through a will rather than having it automatically go to the co-owner. ### Which ownership structure is right for you | **Feature** | **Joint tenancy** | **Tenants in common** | | Ownership shares | Equal | Can be unequal | | Right of survivorship | Yes, share goes to co-owner | No, share goes to heirs | | Best for | Friends with equal investment | Friends with different contribution levels | A real estate attorney can help you determine which structure fits your situation. ## How to buy a house with a friend The process follows the same general steps as any [home purchase](https://www.opendoor.com/articles/how-to-buy-a-house), with a few additional considerations for co-buyers. ### 1. Get preapproved for a mortgage together All co-buyers [apply for preapproval](https://www.opendoor.com/articles/mortgage-preapproval) together. The lender assesses combined income alongside each person's individual credit history. This step gives you a realistic picture of [how much you can borrow](https://www.opendoor.com/articles/how-much-house-can-I-afford-guide) and shows sellers you're serious. During this phase, decide how you'll split the [down payment](https://www.opendoor.com/articles/down-payment-amount) and closing costs. Document the agreement in writing. ### 2. Draft a co-ownership agreement This legal document is essential. A co-ownership agreement outlines how to divide the down payment and monthly mortgage payments, who pays for maintenance and utilities, what happens if one person wants to sell or move out, and how to handle disputes. Working with a real estate attorney to draft this document protects both parties and provides clarity if disagreements arise later. ### 3. Hire real estate and legal professionals Beyond an attorney, you'll want a real estate agent experienced with co-buyers. A knowledgeable local agent understands the nuances of your situation and can help you find properties that work for multiple owners. ### 4. Search for the right property Now comes the fun part. Visit homes together and discuss what you like and dislike about each one. Consider which bedrooms and bathrooms each person would claim, and think about whether the home will work for both of you now and in the future. Properties with flexibility, like duplexes or homes with separate entrances, often appeal to co-buying friends. ### 5. Make an offer and close on the home Once you find the right property, your agent helps you submit an offer. After acceptance, don't skip the home inspection. Problems could cost you both, so knowing what you're getting into matters. At closing, make sure the title reflects your agreed ownership structure. Then you get the keys, and the real commitment begins. ## How to buy out a friend's share of a house Circumstances change. One person might want to move, get married, or cash out their investment. When that happens, a buyout is often the cleanest solution. The process typically involves four steps: - **Get a current home appraisal:** This determines [fair market value](https://www.opendoor.com/articles/how-to-determine-home-value) - **Calculate the co-owner's equity share:** Based on ownership percentage and how much of the mortgage has been paid down - **Secure financing:** Often through [refinancing the mortgage](https://www.opendoor.com/articles/mortgage-101) in one person's name - **Transfer the title:** Update legal documents to reflect sole ownership Having an exit strategy outlined in your original co-ownership agreement makes everything smoother when the time comes. ## Tips for buying a home with friends A few practical habits can help your co-ownership arrangement succeed over the long term. ### Define an exit strategy before you buy What if one person gets a job offer across the country? What if someone wants to sell and the other doesn't? Addressing exit scenarios in your co-ownership agreement, before they happen, removes emotion from future decisions. ### Keep finances transparent Consider a shared account specifically for housing expenses. Regular check-ins on financial obligations help prevent surprises and keep both parties accountable. ### Set boundaries for shared spaces If you're living together, agree on shared versus private areas, guest policies, and household responsibilities. Clear expectations prevent small annoyances from becoming major conflicts. ### Put everything in writing Verbal agreements aren't enough when significant money is involved. Document all decisions, amendments, and financial contributions. Your future selves will thank you. ## Move forward on your terms Buying a home with a friend can be a smart path to homeownership, one that makes financial sense while building equity alongside someone you trust. The key is approaching it with clear communication, proper legal agreements, and realistic expectations. And when circumstances eventually change, whether you're ready to sell your co-owned property or move on to your next chapter individually, having flexible options matters. A cash offer can provide the certainty and speed that's especially helpful when multiple owners are involved in the decision. [Get a cash offer](https://www.opendoor.com/address-entry) [See Homes Near You](#) ## FAQs about buying a house with friends ### Can three or four people buy a house together? Yes. Conventional loans typically allow up to four co-borrowers on a single mortgage. Three or four friends can purchase a home together as long as everyone qualifies individually and the group meets the lender's overall requirements. ### What happens to the house if one co-owner dies? It depends on your ownership structure. With joint tenancy, the deceased owner's share automatically transfers to the surviving owner. With tenants in common, the share passes to the deceased's heirs according to their will. ### How does co-owning a home affect your taxes? Each co-owner can typically deduct their share of mortgage interest and property taxes. However, tax situations vary, so consulting a tax professional for guidance based on your specific circumstances is worthwhile. ### Can you refinance a home you bought with a friend? Yes. Co-owners can refinance together to get better terms, or one owner can refinance to buy out the other. The remaining owner would need to qualify for the new loan independently. ### Is buying a duplex with a friend a good idea? A duplex can work well for friends who want to co-own property while maintaining separate living spaces. Each person gets their own unit while still sharing the financial benefits of ownership. ## Explore Opendoor guides to neighborhoods in your area | **City** | **Neighborhoods** | | **Raleigh** | [Brier Creek](https://www.opendoor.com/neighborhood-guide/brier-creek-raleigh), [Cameron Village](https://www.opendoor.com/neighborhood-guide/cameron-village-raleigh), Downtown Raleigh, [Five Points](https://www.opendoor.com/neighborhood-guide/five-points-raleigh), Glenwood South, Hayes Barton, Mordecai, [North Hills](https://www.opendoor.com/neighborhood-guide/north-hills-raleigh), Oakwood | | **Charlotte** | [Ballantyne](https://www.opendoor.com/neighborhood-guide/ballantyne-charlotte), [Dilworth](https://www.opendoor.com/neighborhood-guide/dilworth-charlotte), [Elizabeth](https://www.opendoor.com/neighborhood-guide/elizabeth-charlotte), [Myers Park](https://www.opendoor.com/neighborhood-guide/myers-park-charlotte), [NoDa](https://www.opendoor.com/neighborhood-guide/noda-charlotte), [Plaza Midwood](https://www.opendoor.com/neighborhood-guide/plaza-midwood-charlotte), [South End](https://www.opendoor.com/neighborhood-guide/south-end-charlotte), SouthPark, Uptown Charlotte, Cotswold, Fourth Ward, Chantilly | | **Plano** | East Plano, [West Plano](https://www.opendoor.com/neighborhood-guide/west-plano-plano), Central Plano, [Willow Bend](https://www.opendoor.com/neighborhood-guide/willow-bend-plano), [Legacy West](https://www.opendoor.com/neighborhood-guide/legacy-west-plano), Old Town Plano, Park Forest, Parkway Village, Preston Meadow, Windridge | | **Dallas** | Uptown Dallas, [Deep Ellum](https://www.opendoor.com/neighborhood-guide/deep-ellum-dallas), [Highland Park](https://www.opendoor.com/neighborhood-guide/highland-park-dallas), [Oak Lawn](https://www.opendoor.com/neighborhood-guide/oak-lawn-dallas), [Lakewood](https://www.opendoor.com/neighborhood-guide/lakewood-dallas), [Bishop Arts District](https://www.opendoor.com/neighborhood-guide/bishop-arts-district-dallas), White Rock Lake, [Preston Hollow](https://www.opendoor.com/neighborhood-guide/preston-hollow-dallas), [Lower Greenville](https://www.opendoor.com/neighborhood-guide/lower-greenville-dallas), [Knox Henderson](https://www.opendoor.com/neighborhood-guide/knox-henderson-dallas) | | **Fort Worth** | Downtown Fort Worth, Near Southside, Magnolia Avenue, [Fairmount](https://www.opendoor.com/neighborhood-guide/fairmount-fort-worth), Ryan Place, Sundance Square, West 7th, Mistletoe Heights, Berkeley, [Ridglea Hills](https://www.opendoor.com/neighborhood-guide/ridglea-hills-fort-worth) | | **Phoenix** | [Arcadia](https://www.opendoor.com/neighborhood-guide/arcadia-phoenix), Central Phoenix, Biltmore | | **Mesa** | Downtown Mesa | | **Scottsdale** | [Old Town Scottsdale](https://www.opendoor.com/neighborhood-guide/old-town-scottsdale-scottsdale) | | **Los Angeles** | [Silver Lake](https://www.opendoor.com/neighborhood-guide/silver-lake-los-angeles), Echo Park, Highland Park | | **Oakland** | Rockridge, Temescal | | **Seattle** | [Capitol Hill](https://www.opendoor.com/neighborhood-guide/capitol-hill-seattle) | ## Find homes for sale across the U.S. | **States with homes for sale** | | [Arizona](https://www.opendoor.com/homes/state/arizona), [California](https://www.opendoor.com/homes/state/california), [Colorado](https://www.opendoor.com/homes/state/colorado), [Florida](https://www.opendoor.com/homes/state/florida), [Georgia](https://www.opendoor.com/homes/state/georgia), [Massachusetts](https://www.opendoor.com/homes/state/massachusetts), [Michigan](https://www.opendoor.com/homes/state/michigan), [Minnesota](https://www.opendoor.com/homes/state/minnesota), [Missouri](https://www.opendoor.com/homes/state/missouri), [Nevada](https://www.opendoor.com/homes/state/nevada), [New Mexico](https://www.opendoor.com/homes/state/new-mexico), [New York](https://www.opendoor.com/homes/state/new-york), [North Carolina](https://www.opendoor.com/homes/state/north-carolina), [Ohio](https://www.opendoor.com/homes/state/ohio), [Oklahoma](https://www.opendoor.com/homes/state/oklahoma), [Oregon](https://www.opendoor.com/homes/state/oregon), [South Carolina](https://www.opendoor.com/homes/state/south-carolina), [Tennessee](https://www.opendoor.com/homes/state/tennessee), [Texas](https://www.opendoor.com/homes/state/texas), [Utah](https://www.opendoor.com/homes/state/utah), [Virginia](https://www.opendoor.com/homes/state/virginia) | **Read More** --- *Originally published at [https://www.opendoor.com/articles/buying-a-house-with-a-friend-or-relative](https://www.opendoor.com/articles/buying-a-house-with-a-friend-or-relative)*