Updated: December 17, 2021

Joint Mortgages Guide

Trying to make your joint mortgage application as watertight as possible? Looking to boost your chances with just one income? Our in-depth guide covers it all.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 17, 2021

If you’re considering a joint mortgage, it’s vital you’re aware of all the moving parts to make sure it’s a strategy that will work for you.

To help you decide if this is the right path, we’ve crafted this guide to give you some direction. Keep reading for a breakdown and explanation of all the essentials you need to know about joint mortgages.

What is a joint mortgage?

As the name suggests, it’s a type of mortgage involving two or more people. This means you can buy a property and share the equity but also carry joint responsibility for mortgage payments.

When you take out a joint mortgage, you can have the ability to tailor the terms to your situation. So, when you’re buying a house with others, you can decide how you’ll split the equity. A key point to keep in mind is that everyone named on the mortgage is responsible for making sure repayments are made each month in full.

Each person involved is a legal owner of the property, which gives you certain protections. As a joint owner, you can’t be forced to leave and the property can’t be sold without your agreement (unless there’s a court order). Joint ownership also means the other owner(s) can’t take out extra loans on the property without your say-so.

The process of taking out one of these mortgages is pretty similar to an individual mortgage application. Most of what you’ll learn here can be applied to a solo application and vice versa.

Joint mortgages can involve some difficult choices that need to be thought through carefully. An experienced broker will be able to guide you through the ins and outs and provide the expertise you need.

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Types of joint mortgages

There are two basic types of joint mortgages – ‘tenants in common’ and ‘joint tenants’. Here’s everything you need to know about each type along with the pros and cons:

Tenants in common

Under this type of joint mortgage, each person involved will legally own some shares in the property. Because you can control who owns how many shares from the get-go, this can be a great option if you’re putting in unequal amounts of money.

This makes it a popular choice if you’re looking to take out a mortgage with friends, family, or business partners as your companion(s). With a tenants in common mortgage, whoever is stumping up more cash at the outset can own a larger portion of equity in the property.

If you do select this type, you’ll need a solicitor to draw up a deed of trust. This sounds really fancy but it’s just a document to say who owns what. Our experts can help match you up with the right people to organise this.

Advantages
Disadvantages
  • The flexibility means ownership does not have to be split evenly, which is useful for unequal deposits or repayments.
  • Each borrower can sell their shares separately or leave them in a will.
  • If you do this as a couple, your partner may not automatically inherit the property if you die.
  • Some borrowers may end up owning much more of the property.
  • There can be more legal costs to think about.
  • An owner can sell their shares to anyone they want, with or without your blessing.

Joint tenants

This is a fairly simple structure and just means that the property ownership is equally split. So, all the borrowers are thought of as one owner for legal purposes, making it a popular type of joint mortgage for couples.

The nature of this type of mortgage is quite personal. Every borrower gets a fair share, but you really are all in it together. For example, if one borrower died, the others would inherit their share of the property. Profits are also shared equally if one of the borrowers was to die.

Advantages
Disadvantages
  • Easy transfer of property ownership on death.
  • Sometimes there’s less legal paperwork (and costs).
  • Can be a more straightforward way to jointly own a property.
  • Equal ownership may not be ideal if one person is putting up more money for the deposit or planning to pay a bigger part of the monthly repayments.
  • Not much flexibility with the arrangement.
  • Joint exposure means creditors can force a sale of the property if one party racks up debt.
  • If the property is re-mortgaged, a whole new joint tenant mortgage has to be drawn up.

How to get a joint mortgage

Now that you’re familiar with the different types of joint mortgages, let’s take a look at some quick and easy steps for how you actually go about getting one set up:

  1. Get your documents ready: Whatever type of joint mortgage you decide on, you’re going to need your paperwork in order. So take some time to sit down with all the other borrowing parties to hash out your plans. Then, one person might have to take charge and ensure the other borrowers have to hand: identification, proof of address, three months of bank statements, proof of income, and any other documents you’d need if you were applying for an individual mortgage.
  2. Check your credit reports: It’s also worth everyone involved doing a quick check on their credit scores before you apply. This way you can try and smooth out any obstacles pre-emptively instead of waiting to hear back on something you could have solved ahead of time. Understanding your own credit situation will make sure there are no surprises, ensuring a much smoother application process.
  3. Speak to a mortgage broker: Speaking to a mortgage broker who specialises in joint mortgages will make sure you can get the ball rolling and receive expert guidance on setting everything up correctly. Your broker will also walk you through the rest of the process and alleviate some pressure from your shoulders. Bespoke advice can also help boost your chances of getting the best deal available by putting you in touch with the right mortgage lender from day one.

Our broker-matching service will quickly evaluate your circumstances and pair you up with a mortgage advisor who’s an expert in what you need. What’s even better is that our service is free, so just make an enquiry to get started.

Getting a joint mortgage on one income

If you’re thinking about a joint mortgage, but there’s only one income for the household, you can still make it work. But, there are a few things to consider.

For starters, because only one income is taken into consideration, this might impact how much you can borrow.

Furthermore, more than one income on an application can sometimes look better and, in some cases, it can be slightly harder to get a single-income application approved. A low deposit and past credit issues could work against you to a greater extent if you were applying for a mortgage based on one income.

If one applicant is unemployed and receiving benefits, some lenders will actually allow some (or all) of those funds to go towards the combined income figure. This could mean you’re able to borrow more, access better rates, or simply have more product options available to you.

With one income on the application, a tailored solution means you can still get the joint mortgage that’s right for you. An experienced broker will be able to identify lenders who may look more favourably on applications of this nature.

Getting a joint mortgage with a retired parent

Another common situation is using a retired parent on your application. Using the bank of mum and dad can work in your favour, but not always.

Make sure you’re aware of these key points:

  • The age of your retired parent may play an important part in the decision.
  • Some lenders may have age caps on who they’ll give mortgages to.
  • Sometimes you can work around mortgage age restrictions by adjusting the term and repayment amounts.
  • The fact that your parents are retired isn’t a huge issue, but they’ll still have to prove a reliable source of steady income.
  • In certain cases, a pension can be more of a predictable and guaranteed stream of income than a salary.

Everything about your retired parents’ circumstances will be taken into account as part of the application. So, if you’re in this situation, specialised support from a quality broker can put you in a prime position to get the best deal available.

Eligibility and deposit requirements

Your eligibility and deposit requirements for a joint mortgage will be really specific to your circumstances. Unfortunately there’s no ‘one-size-fits-all’ blueprint. Eligibility criteria can change frequently.

However, there are some general points that you should be thinking about:

Affordability:
Deposit:
Credit history:
Property type:
Employment:

Whether your combined income is enough to pay for the mortgage payments and monthly interest.

Most lenders will want at least 10%. But it’s not just the size of the deposit that’s important, sometimes where the deposit comes from will also be a major sticking point.

The credit scores of all the applicants will make a difference. So, expert advice can help iron out any kinks.

Anything other than a standard house might require a specialist lender.

Lenders will have preferences about whether your joint income comes from employment or your own business because some providers will specialise in self-employed applicants.

Borrowing limits

Most lenders will use the standard income multiple of 4 to 4.5 times combined salaries of the applicants to work out how much you can borrow on a joint mortgage.

This just means adding up everyone’s annual salary and multiplying it to give you a total borrowing limit. Some lenders might offer higher multiples and others may allow you to factor in additional income such as bonuses, investments, and overtime pay.

There are also mortgage lenders who are willing to offer income multiples of 5 times combined salary and even 6 times combined salary, under the right circumstances.

Because there’s a number of factors that can affect your borrowing limit, speaking to a joint mortgage expert is the best way to make sure you’re getting the best possible deal based on your circumstances.

Get matched with an expert joint mortgage broker

Getting everything in order to apply for a joint mortgage involves lots of different things to consider from each applicant. All the information above will give you a great foundation but speaking to a specialist is the next logical step on your journey.

Bespoke advice for your situation is going to save you time, money, and unnecessary hassle. Being paired up with the right lender straight away is also going to prevent unwanted marks on your credit file.

Just call 0808 189 0463 or make an enquiry and we’ll introduce you to the best broker for your joint situation.

FAQs

Is it better to have a joint mortgage?

A joint mortgage can be an excellent way to share property ownership but it will really depend on your situation. You can potentially borrow more money and you’ll have someone else to share the burden with. But the circumstances of you and your partner(s) will make a huge impact on whether a joint mortgage is the best fit for you.

Is a joint mortgage cheaper?

You may end up paying a lower monthly payment from your pocket because someone else might also be contributing to the payments. A joint mortgage could also lead to lower interest rates if it means you put down a bigger deposit. But whether it works out costing you less money will ultimately depend on the financial strength of who you’re sharing ownership with.

Can you change from a joint tenancy to a tenancy in common and vice versa?

This is possible but there will be a brief legal process to get everything sorted. The exact course of action will depend on where you’re based (England, Wales, Scotland, Northern Ireland). How it works will also vary based on which transition you’re doing (joint to common or common to joint).

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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