Joint Mortgages : What They Are & How To Get One
Everything you need to know about getting a joint mortgage and how a mortgage broker can help
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In this article, we’ll explain how joint mortgages work, who can have one, what lenders will look for on your application and why using the services of an experienced mortgage broker will help secure the best interest rates.
In this article:
- What is a joint mortgage?
- How do they work?
- Who can have one?
- How to get a joint mortgage
- How much can you borrow?
- Eligibility criteria
- Do lenders offer better rates for joint mortgages?
- How does bad credit affect an application?
- What happens to the mortgage if one applicant dies?
- Can you get a joint buy-to-let mortgage?
- Get matched with a specialist broker
What is a joint mortgage?
A joint mortgage works in exactly the same way as a single-person mortgage, the only difference being that it is taken out jointly by two or more people. Joint mortgages are a popular option as they allow most people to borrow more than they could on their own.
To qualify for a joint mortgage, both parties will have to go through eligibility and credit checks, just as you would if you were taking out a mortgage on your own. Every applicant also has to be involved in the legal process, including meeting with solicitors and signing all documents.
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How do they work?
There are two different ways to set up joint ownership, depending on how you want to split the equity and what you want to be able to do with your share. It’s up to you how you decide to split the repayments, regardless of how you own the property, but it’s important to remember that both parties are jointly and individually liable for the mortgage, so if one person stops paying their share, the other person will be expected to foot the bill.
Joint tenants – This is probably what most people think of when they imagine owning a house with someone. As joint tenants, you own an equal 50% share of the house and, should either person die, their half passes automatically to the surviving person. You cannot sell your share of the house separately, or leave your share to anyone else in your will.
Tenants in common – As tenants in common you have more say over the equity share and more control over what happens with your stake. This is often a good option if one person has contributed significantly more to the purchase, i.e. putting up a large deposit from their own savings, and you want this reflected and protected in the equity split.
For example, you could purchase a £300,000 property with one person putting in a £150,000 deposit and a joint mortgage for £150,000. You may opt to become tenants in common and agree to a 75:25 equity split to reflect the deposit contribution. Note: You’re not obliged to do this and many people in long-term relationships opt to stay as joint tenants regardless.
Tenants in common can sell their own shares in the property at any time and can leave their share to someone else in their will.
Who can have one?
Joint mortgages are most commonly taken out by couples, either married, in a civil partnership or simply cohabiting. This isn’t the only option for joint mortgages though, and in areas of the UK where house prices feel unaffordable for single people, joint mortgages for house sharing with friends in particular are becoming more popular.
Joint mortgages with family members are another option, as are joint mortgages with other people for investment purposes, e.g. with business partners for premises or buy-to-let investment properties.
Joint borrower sole proprietor mortgage
This is a specific type of mortgage where two people are jointly responsible for the amount borrowed but only one applicant will have sole ownership rights to the property being purchased.
This is typically used in a scenario where a parent wishes to help their child get a mortgage (usually for the first time) but is happy to waive any rights they might have to the property itself.
To read more about how this works, along with all the potential benefits and drawbacks take a look at our dedicated article on joint borrower sole proprietor mortgages.
How to get a joint mortgage – 3 key steps
There are a few key steps to consider if you want to secure a joint mortgage. Let’s take a look at each in turn to help you get off to the best possible start.
Talk to a specialist broker
It can be tempting to go it alone when it comes to researching and finding the best mortgage deal, but it’s normally a false economy. While it is possible to find a good mortgage deal yourself, a mortgage broker has so much more experience, as well as better knowledge of more specialist lenders, that they’ll be able to save you huge amounts of time and, normally, money too.
A number of brokers we work with specialise in joint mortgages and they’ll be able to help you navigate the specifics around the different ownership structures and make sure that you include all eligible income sources to maximise your borrowing limit.
If you get in touch, we’ll arrange for a joint mortgage expert to contact you directly.
Think about how you want joint ownership set up
This is a really important question when it comes to joint mortgages. As discussed above, the joint tenants and tenants in common ownership models come with very different terms attached and deciding at this point what works best for you is key.
This can be especially important if you are currently in a relationship – money can be a very emotive issue and it can be hard to talk about the future and what might happen if it doesn’t work out, but it’s vital to be honest and open and ensure everything is set up fairly and amicably from the start.
Check your credit report
All lenders will look at credit reports as part of their eligibility checks and with joint mortgages this can be extra complex because there is more than one person involved. Get copies of your credit reports before you start your application so that you can check for inaccuracies and get a clear picture of where you both stand.
Credit history could include links to ex-partners and previous addresses, so it’s important to have a clear picture. Be honest with your broker about your position to give them the best chance of finding you the right lender.
Head to our credit reports page to find out how to check your credit reports for free.
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How much can you borrow?
Lenders calculate how much they think you can afford to borrow based on a multiple of income, so in the case of a joint mortgage, this is a multiple of two or more incomes added together. The standard income multiple used by high street lenders is between 4 and 4.5 times, although there are some lenders who will push this to 5 times or even 6 times, depending on your circumstances.
When looking at affordability, lenders will also consider any other existing financial commitments that will reduce your disposable income such as utility bills, loans, credit cards or car hire purchase agreements.
You can get a joint mortgage if only one person is working – the other partner will just need to earn enough on their own to show that you can afford it. Some lenders take benefits and other sources of income into account, so even if one partner is unemployed they may have eligible income that can be included in the affordability calculations.
To give you an idea of how much you might be able to borrow, we’ve created a joint mortgage calculator. Simply enter some of your basic details and we can estimate the size of the mortgage you may be able to get. Any calculations should be taken only as a guide – your broker will be able to calculate more accurate estimates, based on your income and expenditure.
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
As well as calculating how much they think you can afford to borrow, lenders will want to assess your application based on standard mortgage eligibility criteria. These criteria help lenders decide on the level of risk and the interest rates they can offer.
Key eligibility criteria include:
Most mortgages require a minimum of 10% deposit, but the more deposit you have, the stronger your position and the better interest rates you may be able to secure. You will need to provide proof of the source of your deposit as you would for a sole mortgage, but the deposit doesn’t need to come from a joint account or be split equally between applicants.
Lenders will be looking at your overall credit history rather than making a yes or no decision based purely on a score, so things like the severity of any credit issues and how long ago they occurred will be taken into consideration.
Some non-standard construction property types such as prefab homes or timber or steel framed properties can come with higher risk so lenders will want to be clear on the type and condition of the home you’re buying.
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Do lenders offer better rates for joint mortgages?
Strictly speaking, joint mortgages offer the same interest rates as single-person mortgages, but there may be other factors which indirectly affect your rate. One of the benefits of joining forces with another person to buy a house is that you can combine savings and put down a bigger deposit. Generally the bigger the deposit you’re able to offer, the better the interest rate you can get, as lenders will see you as lower risk.
The simplest way to make sure you’re getting the best possible rate is to use a broker who specialises in joint mortgages.
How does bad credit affect an application?
As with any mortgage application, having credit issues in the past could impact your chances of success as it makes you a higher risk to lenders. The degree to which this could impact your chances of getting a joint mortgage really depends on the severity of the issue, how much it was for and when it happened.
It’s important not to ignore any credit issues, or try to make an application without giving them proper thought, as being declined will only impact your credit record further, and make it even harder to secure finance.
The main difference with a joint mortgage is that one person could have a strong credit history whilst the other applicant could have a very poor one. In this situation, the applicant’s strong record could give the lender confidence that the mortgage repayments can be covered – or vice versa.
If you are worried that your credit record is going to be an issue, it might be worth choosing a broker who specialises in bad credit mortgages. They’ll have a better knowledge of the specialist lenders who are prepared to lend to higher-risk applicants and although you may have to pay higher interest rates initially, you’ll have the option to remortgage in the future once you’ve got a record of regular repayments under your belt and more equity in your property.
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What happens to the mortgage if one applicant dies?
While no one ever wants to think about the death of a partner, it’s important to consider the implications when it comes to your joint mortgage. What happens will depend upon the mortgage setup. If you are joint tenants, the ownership of the property will pass automatically to the remaining partner, who will then also become liable for all repayments. If you are tenants in common, however, the share from the deceased partner will pass to their heirs, as laid out in their will. This could be the surviving partner but it could be children, a charity or another beneficiary.
It can be difficult being left behind, either because a joint mortgage feels unmanageable as a single person or because a sale or other significant change becomes necessary. Our dedicated article on joint mortgages after a death goes into more detail.
Can you get a joint buy-to-let mortgage?
Yes, absolutely. Many people get together with friends or family to buy a property to rent out as an investment, and lenders are happy to offer joint mortgages, often for small groups of more than two people.
As with any joint mortgage, it comes down to affordability and eligibility. As long as your joint incomes allow you to borrow what you need and you meet the deposit, credit and other eligibility requirements then you should be able to get a joint buy-to-let mortgage.
Get matched with a specialist broker
If you’re ready to get started then your next step is to get matched with a broker who specialises in joint mortgage applications. They’ll be able to look at your finances, explore which sources of income could be important and help you decide which form of joint ownership is going to be best for you. Your broker can go directly to the lenders offering the best terms and rates for your circumstances and save you valuable time and money.
Give our team a call on 0808 189 2301 or make an enquiry now and we’ll put you in touch with the best broker for your situation. We won’t charge a fee, there’s no obligation and your credit report won’t be impacted.
Speak to an expert in joint mortgages
Maximise your chance of approval with a dedicated specialist broker
Yes, in theory, you can have a joint and a sole mortgage, just as you could have a mortgage on your own home and a buy-to-let mortgage on a second property that you rent out. The deciding factor here will be affordability. Lenders will take into account your existing mortgage repayments when considering your application for a second one, so you’ll need to show that you can afford both.
If both you and your partner have good credit records then linking your finances through a joint account can have a positive impact on your credit report and could strengthen your mortgage application. Be aware though that if one partner has credit issues, this could have a negative effect on the other person’s credit report, even if you’re getting a sole mortgage whilst living with a partner.
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