Would You Buy a House With Your Friends? The Rise of Co-Buying

Have you ever considered buying a home with a friend, sibling, or even a partner you are not married to? More and more people are joining forces with someone they trust to make buying a home and building equity more attainable.

I myself bought my house with my husband before we were married. A friend I recently spoke to about the subject said she did the same. We both bought homes about a year before we got married.

Another friend of mine bought a house with a friend of his and rents out two of the rooms to their other two friends. If they were already planning on living in a house together before they move in with their girlfriends, why not build some equity – or, in this case, even make a small profit by renting – in the meantime?

The trend of co-buying has risen in recent years. According to this survey, nearly 15% of Americans have already co-purchased a home with a person other than their romantic partner, and another 48% would consider it, with Gen Z being the most willing.

While everyone's financial situation is different, co-buying can offer several potential advantages.

1. You can combine your purchasing power.

When applying for a mortgage together, eligible borrowers may be able to combine their qualifying incomes, potentially increasing the amount they can afford to borrow.

This could open up your options to homes that might otherwise be outside an individual's budget, whether that means an additional bedroom, a better location, or a property with more long-term potential.

Keep in mind that lenders will also consider each borrower's debts, credit history, and other financial information when determining mortgage eligibility.

2. You can split the upfront costs.

Saving for a down payment is one of the biggest hurdles prospective homebuyers face.

When purchasing a home together, co-buyers can contribute toward the down payment and closing costs, potentially reducing the amount each individual needs to save.

For example, if two friends are purchasing a $250,000 home with a 5% down payment, they would need $12,500 for the down payment alone.

If they split that amount equally, each person would contribute $6,250 rather than having to save the entire amount independently.

Of course, closing costs and other homebuying expenses would still need to be considered.

3. You can share the responsibilities of homeownership.

Owning a home comes with more than a monthly mortgage payment.

There's homeowners insurance, property taxes, utilities, maintenance, repairs, and the occasional unexpected expense. Having someone to share those responsibilities with can make managing a household more affordable.

It also means having another person to help when the dishwasher breaks, the lawn needs mowing, or the driveway needs shoveling.

4. You can start building equity sooner.

One of the biggest potential advantages of co-buying is the opportunity to begin building equity instead of continuing to rent while saving for a home independently.

Home equity is the difference between what your home is worth and what you owe on your mortgage.

As you pay down your mortgage principal, you can build equity over time. If your property increases in value, your equity may grow further.

For friends who plan to live together for several years anyway, purchasing a home could provide an opportunity to work toward a shared financial goal.

However, home values can also decrease, and selling costs may reduce the amount of equity owners ultimately receive.

While splitting the cost of homeownership sounds appealing, there's a lot more to consider before signing on the dotted line with your best friend.

• What Happens If Someone Wants to Move Out?
• How Will You Divide the Expenses?
• What Happens If Someone Can't Pay Their Share?

Co-buying isn't necessarily the right option for everyone, but it can be worth exploring if you're ready for homeownership and have someone you trust who shares similar financial goals.

Maybe you're a recent college graduate who wants to stop renting with your roommates. Maybe you and your sibling are interested in purchasing an investment property. Or maybe you and your significant other are ready to buy a home but haven't started planning a wedding.

There's no rule that says homeownership has to follow a traditional timeline.

The important thing is making sure everyone involved understands the financial commitment, communicates openly, and has a plan for the future.

After all, buying a home together is about more than sharing a roof. It's about sharing responsibilities, making financial decisions, and working toward a common goal.

And who knows? Your next roommate might just be your future co-homeowner.

Considering whether co-buying makes sense for you? Connect with a Ruoff Mortgage loan officer today to explore your financing options and take the first step toward homeownership together.

About Ruoff Mortgage

At Ruoff Mortgage, we understand that buying a home is one of life’s biggest moments – not just as a financial decision, but a personal one. For more than 41 years, we’ve proudly helped families turn their dreams into reality. From our roots in northeast Indiana to now serving homebuyers throughout the Midwest, our focus has stayed the same: delivering exceptional service rooted in care, speed, and community. With an average 15-day clear-to-close time, our team is here to make your journey to homeownership as smooth and stress-free as possible. When you're ready to take the next step, we’re here to walk with you, every step of the way.