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What’s a Joint Mortgage?

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A joint mortgage provides a way of borrowing money jointly with your partner, friends or family to buy a property. But what’s a joint mortgage exactly?

A joint mortgage can mean first-time buyers get on the property ladder quicker than if they saved up and bought a property on their own. It can also mean you can borrow more money.

Having one doesn’t necessarily mean you have to live with the other people named on the mortgage.

It’s always worth to speak to a mortgage adviser to discuss your mortgage options. Our preferred mortgage advisers have a 5-star Trustpilot rating from over 5,000 reviews.

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Always remember: Your home may be repossessed if you do not keep up repayments on your mortgage.

How do joint mortgages work?

Joint mortgages work in the same way as a regular mortgage. You’ll pay a deposit on a property, then take out a mortgage for the remaining amount.

The people named on a joint mortgage can both contribute to the deposit, and split the monthly repayments. A joint mortgage can boost your borrowing power as the lender will take both incomes into account.

It’s important to understand that if you have a joint mortgage with someone else, each party will be “jointly and severally liable” for keeping up the repayments. This means the mortgage lender can pursue anyone named on the mortgage if the debt isn’t repaid as agreed.

Some lenders will allow up to four people to have a joint mortgage together and use all four incomes in affordability calculation, but this is rare.

Different types of joint mortgage

When you take out a joint mortgage with someone else. You will need to decide how the property will be owned. There are three options:

  • joint tenants
  • tenants in common
  • joint mortgage sole proprietor (JMSP)

Joint tenants is typically used for married couples, tenants in common for friends or couples buying together. And JMSP when parents are helping their child buy a home.

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Always remember: Your home may be repossessed if you do not keep up repayments on your mortgage.

What is joint tenants?

‘Joint tenants’ means that all the people who own the home have equal rights over it.

This type of set up is usually used by married couples or long-term partners. Selling the property requires the consent of both parties. And the proceeds will be split equally regardless of contributions to the deposit or mortgage payments.

Joint tenants can’t leave part of the property to someone else in their will – it automatically passes to the other owner or owners.

What is tenants in common?

Tenants in common allows each person to own a different percentage share of the home. This is useful if one person is contributing more to the deposit or mortgage payments than the other person.

For example, a couple may own a property with a 60:40 split.

Tenants in common is typically used by unmarried couples, friends buying together or investors pooling their money. It’s also used by couples who have children from previous relationships as it allows owners to choose who their share of the property goes to when they die.

When the property is sold, the proceeds can be split in accordance to the share of the property each party owns.

Whats a joint mortgage sole proprietor mortgage?

A joint borrower sole proprietor (JBSP) mortgage allows two or more people to buy a property together, but with only one person owning the property.

With this type of mortgage, the lender will take the income of all the parties into consideration when deciding how much to lend. All the borrowers will have joint responsibility for the mortgage payments. 

However, not all the mortgage holders will be named on the title deeds and therefore they won’t have any legal claim over the property. Only the property owner’s name will be on the title deeds, and only they will be responsible for paying stamp duty.

Lenders often insist that the person on the property deeds lives at the property – but there’s no requirement for the other person to live there too. 

Parent will usually be advised to seek independent legal advice outside of the mortgage process. This is to ensure that people are aware of any additional costs.

Can I get a joint mortgage?

The requirements for a joint mortgage are the same as if you apply for a mortgage alone. This means the lender will carry out an affordability assessment and a credit check to ascertain how much money it will lend to you.

With a joint mortgage, all the borrowers’ incomes and outgoings – including other mortgages will be taken into account when the lender decides how much money it will lend.

Does a joint mortgage affect your credit score?

Taking out a joint mortgage with someone else could affect your credit score.

This is because taking out a joint mortgage creates a ‘financial association’ for credit scoring purposes.

If you apply for another type of credit (a credit card, for example), the lender may look at the credit information of your financial associate when deciding whether to lend you money. Even if you’re applying alone.

So, if you take out a joint mortgage with someone with a poor credit score, it could impact your ability to borrow money in the future.

Our advised mortgage advisers have been rated 5-stars on Trustpilot. They can help you with finding the right deal suited for your circumstances.

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Always remember: Your home may be repossessed if you do not keep up repayments on your mortgage.

Last Updated: December 15th, 2022