Should you say ‘I do’ to a joint mortgage?

Should you say ‘I do’ to a joint mortgage?
With Valentine’s Day around the corner you might be starting to feel a bit romantic. Perhaps you’re thinking about moving in with your partner, or even popping the question? There’s a practical consideration you’ll want to think about before you make the big commitment of living together: How will the mortgage work?

Joint mortgages

A joint mortgage is simply a mortgage that you take out with someone else. They’re often taken out by couples but you don’t need to be married. They’re available to unmarried couples and couples in civil partnerships. You could also buy a property with a friend, family member or even a business partner.

How can a joint mortgage help me?

When taking out a mortgage, two of the main factors lenders will look at will be your income and your deposit. Adding a second income and boosting your deposit with your partner’s contribution could help to get you onto the ladder earlier than you’d hoped, buy a larger property or even in a better location than those you’d been previously limited to.

Are there any risks to joint mortgages?

Mortgage lenders will run a credit check on both of you during the processing of your application. If your mortgage partner has any bad credit it could influence the lender’s decision on your application.

How does owning a property together work?

There are two main ways that owning a property jointly can work:
 

1) Joint tenants

All people listed on the mortgage are seen as a single owner, each having equal rights to the property. If you sell the property, you’ll split any profit made equally and if one of you were to pass away, the other would then receive full ownership of the property and you wouldn’t be able to leave your share of the property to anyone else in your will. This method of ownership is often taken by long term couples who would want their half of the property to be passed on to their partner.

2) Tenants in common

As tenants in common you’d each have a legally separate share in the property. This can be a more common method of ownership among friends and family. You can own different shares of the property and split them however you like. You can sell your share in the property and it won’t automatically pass to the other party if you pass away. This allows you to leave your share of the property to anyone you choose.

Is a joint mortgage right for you?

The best way to find out if a joint mortgage would work for your circumstances is to get in touch with one of our advisers. We’ll be happy to talk you through the details and get you on the right track. Our service is fee free and we’ll do the legwork for you.
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