Never live with a friend you want to keep...

(Someday you'll thank me for this. Probably sooner rather than later, too!)

As far as I know, Lenders won't accept a downpayment that has been financed and...I'm guessing you don't have much of a credit history

So, it would be a case of 'I wouldn't want to be part of any club who would have me as a member.'

The terms could be scary.

P.S. And I agree with mmmagique, completely.

I'll be blunt. That's a really bad idea (on way too many levels), and it's quite possibly illegal as well. There's not a snowball's chance a legit mortgage officer would even entertain such a loan for a house (even on a rip-off sub-prime loan).

I also am in complete agreement with mmmagique's comment. Unless you want to see how fast a "friendship" will sour in a business relationship, I'd seriously wouldn't entertain this idea of yours.

There was a post here in the spring about a parent co-signing a loan to help the kid buy a house to live in while they were in college. They would rent rooms out IIRC. I'll have to see if I can find the post for you, there was a lot of great input.

I also have to agree with everyone else that says it's the fastest way to sour a friendship. What if something happens, one can't pay their share of the loans, or decides to drop out of college? They can also decide that the college you are attending now is not the college for them.

Even with renting you could have problems. When my son went to the Art Institute of Philadelphia he was in their dorms, a 2 bedroom apartment. He shared with another guy. You never know someone until you live with them, this one guy didn't use dish soap when washing dishes and was pretty much a nightmare to live with as he decided most of the apartment belonged to him. The 3rd guy was lucky as he had his own room and could close the door. For a time, we paid rent on something my son couldn't live in, he was happier staying home and commuting.

well, you could use your "other means" to buy the house, and borrow for your education.

But I tend to think (esp. in a falling market) that it's a bad idea to buy property while you are still in school.

And abad idea to buy property jointly w/ someone y ou don't know really well or have a permanent stake in the relationship (like a sister, brother, husband, wife) that will give both of you a reason to try to be reasonable.

"Never live with a friend you want to keep... "

I got my first off-campus apartment with a friend about 30 years ago when I was in college.

We'll be celebrating our 29th wedding anniversary in December. :-)

I would very strongly recommend against buying a house with anyone other than a family member or spouse, especially since I suspect you're in your late teens/early twenties. (And no matter what age you are, I would think carefully about the relationship before buying with a family member, too.)

Buying with other people can put you in a difficult situation when it comes time to sell. What happens if one person is ready to sell and the others aren't? Or if everyone except one person is ready to sell? Some additional questions to consider, since you guys are entering college:

1. What happens if someone decides to switch schools? When I was in college, I heard of one guy from my high school who decided to switch schools halfway through his first year. His gf was attacked at a party, and the whole thing poisoned the whole school for him.

2. What happens if some of you finish before the others? Some people make it through their college education in 3.5-4 years. Others take 5 or 6. How can you know for sure that all of you will finish on the same schedule?

3. What happens if one or more of you starts a serious relationship and decides to live with the other person? Does the significant other move in? Does the housemate move out? How does that affect the financial relationship between you guys?

4. Buying a house together locks you into a situation. What happens if one or more of you has a conflict living with each other? You're great friends now, but living with people makes a difference. Also, what happens if one or more of you develops a lifestyle that doesn't mesh well with the others? When I was in college, I had roommmates for one summer who were loud all night long, while I had to get up at 6 a.m. to go to work. Or, even worse, one of my brothers had a roommate who developed a serious drug problem while they were living together. Being in rentals enabled us to get out of bad situations more easily than being co-owners would have.

5. Have you talked with an accountant to see how the co-ownership would need to be addressed on your collective taxes? My guess is that a joint ownership between multiple parties would need to be divided somehow.

6. Even if you can afford to buy the house, can you afford to maintain it? What happens if the furnace needs to be replaced? Or if the refrigerator breaks? What about the usual homeowner maintenance expenses-- lawnmowers, shovels or a snowblower, etc.? If you rent, that stuff is usually the landlord's responsibility. If you buy, it's on you. As college students, will you be able to afford it?

Personally, I would opt to live in the dorms... but that's mostly because I feel that the dorms are a part of the college experience. You meet different people there, and I thought it was mostly a good place to be. I figured that I would have my whole life to rent apartments/buy houses, but that dorm life was something I would only get to do once. At my school, people generally lived in the dorms for the first couple of years and then quite a few of them moved to rentals for the rest of the time.

People undergo a lot of changes while they're in college, and I think it makes sense to keep the living arrangements more fluid. If you all really want to live with each other and don't want to live in the dorms, my advice is to rent an apartment or a house. That way, it's easier to change things if any of you need things to be different. I think you'll all be happier that way.

Sounds like a trainwreck...

Why do you have to buy a house? Why not rent one, get a parttime job and save up for a TV. Using your student loan funds for a television sounds pretty immature.

I agree with everyone else. BAD idea on many levels. And quite possibly illegal.

dgmarie: "...get a parttime job and save up for a TV. Using your student loan funds for a television sounds pretty immature."

::scratching head::

Huh?

bethesdamadman, read the OP's post "We have thought of the idea to use one of those sudent loans on the television."

Both are bad ideas. When you take those loans you agree to spend them on education expenses, not on investments. I'm having a hard time picturing you getting a mortgage as a student, especially since the downpayment would be borrowed money.

gardenspice: "bethesdamadman, read the OP's post "We have thought of the idea to use one of those sudent loans on the television."

I did read the OP's post. If you read his entire post you will note that he does not possess perfect command of the English language. I believe you are misinterpreting his writing and that the OP is referring to having seen student loans advertised on tv. He does not want to use a student loan to buy a tv.

I think you are correct. He does, however, want to use one for a down payment on a house, then rent it out to cover costs.

He should read the posts on renting. I'd never invest in property if I didn't have the means to meet the payments without having to rent or lease something out. The returns are too risky and the best you can sometimes do is use it as a "business loss" to reduce your tax obligations. It's like counting chickens before they hatch.