You don’t need to be married in order to buy a house with another person. In this age of rising house prices and stagnant salaries, the only way some people could ever hope to own a home is to pool their resources with family or friends and pay off a mortgage together.

But you need to be careful. Entering into a mortgage loan with one or more friends or family members is a long-term and risky enterprise. You need to make sure you pick the right people before you ever apply for a loan.

How does it work?

There are various types of partnerships when it comes to buying a house, but in all cases, everyone whose name is on the mortgage loan is liable for its entire sum. Let’s say, for example, that you buy house with two other people and each agrees to pay one-third of the mortgage. Should one person default on their portion, the other two are still required to pay the full amount. That’s why it’s important to choose people who are financially responsible, or it could get messy fast.

Should I have an escape plan?

Many people who enter into these types of mortgages have legal documents drawn up that outline what should happen in the event of various contingencies. Ask your real estate professional and legal team what the best course of action would be for your circumstances.