A joint mortgage is a mortgage that is shared with another person (or people). Most people take out a joint mortgage with a partner, but you can also take one out with your parents or pool your resources and take out a joint mortgage with friends. Some lenders allow up to four people to buy together.
It can be a great way to get onto the property ladder so if you’re not able to buy on your own, a first-time buyer joint mortgage could be one realistic way of taking your first steps towards home ownership. It could also be a good option if you want to buy a larger property or are hoping to move to a more expensive area.
However, it’s a serious commitment that you should take the time to thoroughly think through before signing on the dotted line. Each person named on the mortgage is jointly liable for the debt, so if one person can’t keep up with their payments, the others will need to make up the shortfall.
A mortgage is a long-term commitment and there’s the real possibility that one of you might want to move out early or sell their share, so you should also think about these points before applying for a joint mortgage. It’s important to seek professional legal advice on the options available to you when it comes to property ownership, so you know exactly where you stand if things change in the future.
Joint mortgage process
Thinking of applying for a joint mortgage? Whether you’re applying with your partner, parents or friends, the process is the same. You can typically borrow up to four or five times your income, although this will vary from lender to lender. Use our joint mortgage calculator to get an idea of how much you might be able to borrow.
When you’re ready to make your joint mortgage application, use our online Mortgage Finder tool to find out which deals you might be eligible for.
Types of joint ownership of property
When you make your joint mortgage application, your solicitor will ask what type of joint mortgage you want and whether you’re applying as joint tenants or tenants in common. When you’re joint tenants, you have joint ownership of the property - that is, each of you has equal rights to the whole property, and if the property is sold, any profits are split between each of you equally. Tenants in common refers to a type of mortgage where each party owns a specific share of the property, drawn up in the ‘deed of trust’ by your solicitor that clearly states how much of the property each person owns.
Joint tenants
This is most common for those applying for a joint mortgage with a partner as it means that, in the event of the death of one of the owners, the property will automatically pass onto the other owner. This is the case even if someone states in their will that they wish their share of the property to be passed to someone other than the person they own it with.
Tenants in common
This type is more common for those looking to apply for a joint mortgage with parents or a joint mortgage with friends. It means that one person may own 30% of the property and the other person has 70%, or two people might own 40% each and the third owner may have a 20% share of the property. With this type of joint ownership, the share can be passed on to a named beneficiary in the event of death.
Joint mortgage eligibility criteria
When you apply for a joint mortgage, lenders will look at the credit score of all applicants. This can be beneficial if one of you has a lower credit score but the other person has a high one - but it could also adversely affect your application if one of your party has a particularly low credit score.
If you’re applying for a joint mortgage with retired parents, the criteria may be stricter than if your parents were in full-time employment, as they’ll need to be able to prove that they can meet the monthly payments. Rules vary between lenders, but some impose maximum age caps on joint mortgages.
Many lenders also offer joint Buy to Let mortgages. Again, the eligibility criteria vary from lender to lender but in general, the rule should be the same for a Buy to Let joint mortgage as for an individual Buy to Let loan. L&C can help you to navigate the different options and find the solution that works best for your circumstances. Check if you’re eligible for a joint mortgage here.
Finding the best joint mortgage deal
Here at L&C we can explain everything you need to know about joint mortgages so that you get the best deal for your circumstances. Find out more about how they work in our guide to joint mortgages.
As with any mortgage application, it’s wise to ensure that your credit score is as high as possible before applying. You can get a copy of your credit report for free - be sure to carefully check it for errors, as even small discrepancies can affect your score and, subsequently, your ability to get good joint mortgage rates.
As well as checking your report for errors, you should ensure that you’re on the electoral roll, close any credit cards or store cards that you don’t use, and always make sure that you repay any debt on time.
Joint mortgage repayment plan
Each person on your joint mortgage is liable for the debt, so you all need to ensure that you can afford your monthly payments. If one of you defaults on your payments, the others will have to step in and cover the amount.
Sometimes circumstances change and someone will want to get out of the joint mortgage, whether due to a relationship breakdown, or simply a change of circumstances. If that happens and you want to buy one party out of the mortgage, you’ll need to arrange for a ‘Transfer of Equity’ to take their name off the mortgage. The person remaining on the mortgage will need to prove they can afford the whole mortgage on their own, and you’ll also have to arrange for a valuation so you can assess how much equity each person has in the property.
Apply for a joint mortgage with L&C
You can compare all the top mortgage deals from across the market using our online Mortgage Finder, and our expert advisers will be on hand to provide you with all the help and advice you need.
Once we’ve found the right joint mortgage for you, you can apply online and one of our dedicated case managers will support you through your application. Get started today and see how L&C can help you to secure a joint mortgage, whether with a partner, family or friends.
