If you buy a property in conjunction with a friend, family member, property investor or even a relative stranger, you are joint owners of that property. If you take out a mortgage together then you will getting a joint mortgage. Joint ownership is sometimes also called joint equity – also sometimes mistakenly called shared ownership. Shared ownership is actually something different.
Joint mortgages can mean the difference between buying a first home and not and in the UK joint mortgages are becoming more and more popular. More and more people are clubbing together to buy their own home. Securing a joint income mortgage enables them to get out of the rental trap and invest in their future because a joint income mortgage would be greater than a sole income one. In many cases, sharing costs though joint ownership can even work out cheaper than renting! If you take mortgage advice you will be able to compare the cost of renting and compare it with the cost of a joint mortgage. Find out more in our joint ownership section.
Having a joint mortgage means that you are both or all responsible for paying the mortgage payments. It does not matter to the mortgage lender who pays how much, as long as the monthly repayments or interest are paid to the lender. When you come to terminate the joint mortgage, you will be able to look at your records to see the proportions in which the remaining equity should be split. Locate a families solicitor to help you draw up wills and ownership agreements and get a quote for conveyancing at the same time.
If any of the joint owners is unable to pay into the joint mortgage for any reason, the payments will still be required by the lender and alternative arrangements to pay the mortgage or reduce the amounts that need to be paid, should be made.
As joint mortgages are a developing trend, more and more mortgage lenders are offering mortgages designed specifically with joint owners in mind, and the choice of joint mortgages continues to increase. A typical example of what the mortgage lenders will lend is 3 x one person's salary plus 1 x each of up to three other joint owners. Some lenders will lend greater multiples. The right borrowers can even borrow over 3.5 x combined salaries. Arrange an appointment with a mortgage advisor for joint mortgage advice for you and your group.
However, every pair or group's situation will be different – each person may pay a different amount towards the deposit, or make different payments into the mortgage each month. Perhaps some will have parental involvement in the arrangement. Also there are many types of mortgages available and various insurance policies that need taking into consideration. Joint mortgage protection of the payments would most likely be required.
Joint mortgage rights and responsibilities are important to understand as each month, the mortgage payment will need to be paid - however your personal circumstances may change. Mortgage joint ownership is not without its risks and these need to be fully
understood. There is more about that in our joint ownership guide.
Other mortgage guides and relevant pages:
Mortgage Comparison - First Time Buyer Mortgages - About First Time Buyer Mortgage Advice - First Time Buyer Mortgage Brokers - Buy to Let Mortgages for First Time Buyers - Remortgages for First Time Buyers - Shared Ownership Mortgages - Help with Mortgages for First Time Buyers - Mortgages for Parents of First Time Buyers - Shared Appreciation Mortgages - Shared Equity Mortgages - Financial Advice for First Time Buyers - Overseas Mortgages for First Time Buyers - Request First Time Buyer Mortgage Advice - Find your First Property - New-Build Gifted Deposit Deals - Best First Mortgages Comparison Table
Features, advantages and disavantages of specific first time buyer mortgages:
100% Mortgages l Cashback Mortgages l High LTV Mortgages l Graduate Mortgages l Professional Mortgages l Mortgages with Parents l Guarantor Mortgages l Family Offset Mortgages l Mortgages with Friends or Family l Mortgages at University l Rent a Room Mortgages l Affordable Mortgages l Interest only Mortgages l Part Repayment Part Interest Mortgages l Interest-free Start Mortgages l Shared Ownership Mortgages l Poor, Adverse or Poor Credit Mortgages l Key Worker Mortgages l Shared Equity Mortgages l 30, 35, 40 year term mortgages
www.cml.org.uk – council of mortgage lenders.