What is a joint mortgage?

What is a joint mortgage?

It’s exactly like a normal mortgage, except that it’s in the names of two or more people. You might share a mortgage with a partner, friends or family, who may be living with you or just helping you to buy your property. You might also purchase a property as an investment with a business partner. A joint mortgage needn’t be limited to two people, either, as some lenders may potentially lend to up to four people who are looking to purchase a property together.

Purchasing a home with friends, a partner, family or others may mean that you’ll be able to get a larger mortgage than if you were to buy it on your own. However, as with any other financial decision, there could be disadvantages too.

Property ownership

Ownership of the property needn’t necessarily be split evenly between you; however, you could be held responsible if the other person or persons don’t meet their monthly mortgage repayments. Options for joint ownership include:

  • Joint tenants

    Joint tenants have equal rights to their property, which means that they’ll also get equal share of any profits if the home is sold. If one person dies, the property will be inherited by the remaining owner or owners.

  • Tenants in common

    This option allows you to have different shares of ownership in the property. You can choose who you want to leave your share of the home to – it doesn’t necessarily have to be the other owner or owners.

Joint mortgages and credit reports

Lenders will assess all applicants for a joint mortgage. This means that they’re likely to check your credit report. This includes information for each person like:

  • Your current and previous addresses
  • Credit agreements that you might have
  • Any missed or late payments
  • Any financial associations that you may have.

This kind of information will help lenders to form a view of whether you’re likely to make mortgage repayments. They’ll use it to make a decision on whether to give you the joint mortgage. The lender will have to be satisfied that all applicants meet their criteria before granting the loan.

If you’re thinking of applying for a joint mortgage, you may want to plan beforehand, including getting a copy of your credit report. Your Equifax Credit Report & Score – which is free for the first 30 days then £14.95 monthly – will give you a view of your credit history, as well as how creditworthy a lender may find you.

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