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What is a joint mortgage?
Joint mortgages are accessible to married couples, unmarried couple, civil partners, cohabiters, family and friends or business partners. While the majority of mortgages are for two people, some lenders will permit four people to buy a house together.
The chances are, you could borrow more on your mortgage if you buy with other people. You can buy a house with one or more other people, with the both of you or even all of you listed on the mortgage. You can decide how to share the equity, with all parties named on the mortgage being responsible for mortgage repayments.
Can I borrow more under a joint mortgage?
Yes, typically you will be able to borrow more when teaming up with someone else. The affordability is based on both of your incomes, rather than your income alone. The calculation will also take into account your credit record, other financial commitments and expenses for the both of you.
If you are able to save a higher deposit between you, this will help to reduce your Loan to Value and access better interest rates - otherwise the mortgage will cost the same as for a sole applicant.
How joint ownership works:
All those named on the mortgage are equally responsible for making repayments.
However, if one party stops paying their share, the lender may pursue the other party to cover the repayment. You will also be required to jointly agree when remortgaging, meet with solicitors and mortgage advisors, and complete application forms together.
The types of joint ownership:
Joint Tenants
As joint tenants, all borrowers are legally seen as a single owner and have equal rights in the property. This is typically chosen as an option for long-term couples. If one borrower dies, the joint borrower inherits their share - even if a will says differently, if the property is sold the profits are shared, and remortgaging needs to be completed together. You will need to get everyone to agree before you can sell the house, or you can look to change your mortgage arrangement to tenants in common. One homeowner can then sell their share to the other.
It is possible to get out of a joint mortgage but it can be complicated. The most straightforward way can be to sell the property and share the funds.
Tenants in common
Tenants in common arrangements are different to join tenants as they allow you to own legally separate shares in a property. You can split the ownership however you like, and this does not have to be an even split. You can also sell your share in the property separately to others, and leave it in a will for others to own.
Tenants in common mortgages are generally for family, friends or business partners who are looking to buy a house together.
How will a joint mortgage affect my credit report?
By associating with others on a joint mortgage, your credit reports will be connected by way of a financial connection. You can see this on your credit report online. It is important to note that if the person you buy with has bad credit, this may impact on your own credit record.
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Last updated 28 February 2024