Group Home Loans Soar 50% In The UK
With rising house prices and home loan interest rates in the UK, one product being offered by the UK’s biggest bank, HSBC, is being greeted with growing interest – HSBC’s group home loans.
With HSBC’s research indicating that three out of every four potential new home buyers would give serious consideration to buying a house with their friends if it meant they could own a place of their own, and with approvals of HSBC’s group home loans having soured over 50% in the year to-date, clearly HSBC have targeted their group home loan product to a niche market.
Nonetheless, the HSBC group home loan doesn’t come without its complications. For a start, with the legal limit on the number of joint owners allowed on any given property being four, the maximum number of people that can club together and apply for a HSBC group home loan is up to four people. Even here though, living in a shared house with up to four friends can be a stressful environment. This stress can be increased if each of you in the house is responsible for paying a quarter share of the mortgage, rather than just having to pay the rent. Friendships can be strained beyond repair under such circumstances.
If that is the case, problems will arise as to how best to go about unwinding the situation. For example, do you agree to buy one and other out, or do you sell the property? Worse still, would you be responsible for paying the mortgage payments of one of your house buddies if they decide to leave the house? Also, what happens if one of you wants to sell, but the others do not?
All of these problems, as well as how the care, maintenance and bills for the house will be arranged and paid for, will need to be overcome with serious thought and discussion among any group who decide to buy a home together and it would probably be prudent to put everything down in writing between you before you go ahead and buy the property. That way each of you will know where you stand in the unfortunate event that problems do arise down the road.
However, with most home loans currently being offered to first-time buyers not being enough to cover the cost of buying a new home, the HSBC group home loan is a welcome alternative for young first-time buyers to consider.
11th September 2006
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