Now, as Guildford mortgage broker, we’ve touched on pretty much everything when it comes to the topic of mortgages.
Whether we’re producing a guide for first time buyers, exploring the benefits of equity release or covering how to get a buy to let mortgage, over the years we’ve committed to arming our clients and readers with as much mortgage-related knowledge, and providing as much reputable mortgage advice as possible, through our ongoing series of articles.
Yet one area we haven’t covered is joint mortgages. In a bid to put that right, we’re going to tackle it now.
Feeling the pinch
The world’s a little uncertain right now. What is certain, however, is the fact that the cost of living is going up and, depending on your financial situation, there’s a chance that the prospect of homeownership is fading into the distance.
The best mortgage deals in the UK aren’t what they were this time last year and hard-saved deposits are being eroded by the highest rates of inflation experienced in three decades.
So, what’s the solution?
A mortgage shared is a mortgage halved
One potential route to fast-tracking homeownership is applying for a joint mortgage.
A joint mortgage is any mortgage in which the mortgage liability is shared between one or more people. This type of mortgage is quite common amongst married or co-habiting couples. So common, in fact, that if that describes your situation, you might have even forgotten that you do, in fact, already have a joint mortgage.
Perhaps less common is a joint mortgage involving one or more people who aren’t in a relationship, but whose decision to enter into a joint mortgage is solely to boost buying power. In this case, the two main types of joint purchase are likely to be more important.
Joint tenants vs tenants in common
If you purchase as joint tenants, you do so on the basis that you will have equal ownership rights with all those who share the mortgage with you. If buy as tenants in common, your ‘stake’ in the property is a reflection of how much deposit you put in. If you’re a first-time buyer who’s putting in the lion’s share of the deposit in order to secure a property, it’s likely that you would want to go down this route.
In both cases, if one of the owners wants to move on (and move out), then you and any remaining owners can buy that person out – as long as the lender is comfortable that the mortgage can still be paid.
If you are considering getting a joint mortgage with friends or family, it’s critical that you trust them. For example, if one of the mortgage holders suddenly stopped paying their share of the monthly repayments, the lender would expect the shortfall to be met by the remaining owner(s).
The benefits of joint mortgages
The biggest benefit of getting a joint mortgage is that you are able to buy a property that you simply couldn’t afford alone as a result of being able to borrow more. Also, on the assumption that everyone entering the joint mortgage with you is bringing their own deposit, putting down a larger amount will give you access to some of the best mortgage rates.
Of course, there are some disadvantages, too, such as being reliant on someone else to continue making mortgage payments. Equally, if you or one of the other owners wants to end the joint mortgage, it may have negative repercussions for the remaining owners.
However, there’s no denying that in a climate whereby the cost of living seems to be increasing on a daily basis, a joint mortgage could help get you on the property ladder more quickly – and possibly more comfortably – than going it alone.
Looking to speak with a joint mortgage specialist? Our team of mortgage brokers in Guildford can talk you through the pros and cons of joint mortgages and, if you wish to apply for a joint mortgage, handle the entire process on your behalf. Get in touch on 01483 238280 or e-mail info@complete-mortgages.co.uk.
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