Updated: December 17, 2021

Joint Mortgages With Parents & Other Family Members

Looking for a joint mortgage with parents or siblings? Whether your relatives are retired or working, our guide will tell you exactly how to get a family mortgage!

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 17, 2021

With house prices reaching a record high in 2021, the dream of home ownership can feel even further out of reach for many. But don’t give up just yet – options could be available, and one that might be worth considering is a joint mortgage with parents or other family members.

By following this guide you’ll gain a full understanding of how this type of borrowing works, which type of mortgage would suit you best and where to look for guidance.

Can you get a mortgage with family and friends?

Yes you can. As far as mortgage lenders are concerned, there is no difference with this type of mortgage to any other type of joint mortgage application. And by using your combined annual earnings, the overall borrowing potential can be much higher.

Lenders are usually happy for you to club together with siblings, parents, extended family and even friends for a joint mortgage. The application would be treated largely the same as it would if you were applying with a spouse, though the lender may place extra scrutiny on the age and affordability of the oldest applicant if you’re applying for a joint mortgage with your parents or grandparents.

There are mortgage brokers who specialise in arranging mortgages for people who are applying with friends and family. They know exactly which lenders are the best fit for these arrangements and their expertise could help you save time and money in the long run.

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Criteria applicants need to meet

Mortgages with friends and family are subject to the same lending criteria as standard joint mortgages.

All of the applicants who will be named on the title deeds will be assessed based on the following factors…

Size of deposit
Credit History
Affordability
Age

The more you have between you, the better. You’ll likely need a minimum of 10% at most lenders, but it’s possible to get approved with just 5%.

One applicant having bad credit can affect the entire application. A specialist lender might be required if the bad credit is severe.

One of the benefits of joint mortgages with family is that you can pool your income together and potentially borrow more than you could alone. Most mortgage providers cap their lending at 4.5 times combined income, some 5 times and a few will go to six times. If you’re applying with a retired parent, there may be extra scrutiny around their income to make sure they can afford their share of the mortgage

Many lenders have an age cap on their mortgage products of 75 years old. So if you are applying for a shared mortgage with parents who are 60 years old, the maximum mortgage length you may be eligible for might be 15 years. Which may make the monthly repayments unaffordable.

How to apply

Here are the steps to take to get your application off to the best possible start…

Step 1.
Step 2.
Step 3.

Download your credit reports:

All of the applicants should start by doing this. You can download your files for free from our dedicated credit report hub. Make sure you check through the information to ensure this is a true reflection of your credit history; challenging any inaccuracies that you find and removing any out dated information held on you.

Get your documents together:

Every applicant will need to provide the lender with several documents including the following…

  • 3 months of bank statements
  • Proof of address
  • Proof of income

You can find a full list of paperwork you will need for a mortgage application in our complete guide to mortgage applications.

Speak to a specialist broker:

There are lenders who specialise in mortgages for people who are applying with friends or family, but you’ll need a broker to find them. We work with mortgage specialists who arrange deals for people under these circumstances every day, and we’d be more than happy to introduce you to one of them for free.

Make an enquiry and we’ll set up a free, no-obligation chat between you and a broker who specialises in friends and family mortgages today.

Types of mortgage available

Joint residential mortgages that you can apply for with friends and family tend to fall into two categories; joint tenancy and tenancy in common, but other options are available.

Joint tenancy

With a joint tenancy mortgage, each applicant owns an equal share of the property. And if one person were to die, their share would automatically be passed on to the other owner/owners.

Tenancy in common

With a tenancy in common, you can stipulate what share each of you own of the property. This can be beneficial when one party is contributing a much higher investment into the deposit than the other, for example. And should one of you die, you can each choose who to leave your share of the property to.

Where each of you own a different percentage of the property, you may need to pay for a solicitor to draw up a legal document called a Deed of Trust. This outlines what percentage each of you own.

Joint application sole owner mortgage

There is also a third option which is a joint applicant sole owner mortgage. This is where a person agrees to be jointly responsible for the debt, but sacrifice their share of the home ownership. This also avoids the potential of additional stamp duty fees where it acts as a second home.

This third option is only usually available from specialist lenders, so if you think this may be the best fit for you, get in touch and we can arrange for a broker with experience in these types of mortgages to contact you directly.

Guarantor mortgages

Guarantor mortgages can help you get onto the property ladder with family support and are a viable alternative to a parent-child joint mortgage.

Here’s how they work: a family member – usually a parent, but not all lenders insist on this – either secures the mortgage against a property they own or places savings into an account held by the mortgage lender.

This helps to offset any risk the lender might be taking on by offering you a mortgage by yourself, and it may even be possible to get approved with little-to-no deposit, depending on how much savings your guarantor can put down, or how much equity they hold.

Gifted deposit mortgages

Another way your family could help you get onto the property ladder is by gifting deposit funds to you. Most lenders would need this to be a close blood relative, but few will have an issue with this deposit source if that’s the case.

The main requirement here is that the gifter will need to state in writing that the deposit funds are a gift that doesn’t need to be repaid, and that they will have no interest in the property.

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Pros and cons of buying with friends or family

The main benefit of getting a joint mortgage with a family member is you get to own your own home, albeit in a shared capacity. You will also find that you can borrow significantly more than you could alone and might even qualify for a superior interest rate.

There are, however, potential drawbacks to consider as well.

Such as…

Meeting the repayments

One of the main considerations when entering into a joint mortgage is that you have shared responsibility to pay back that debt. This means that if one of you doesn’t make the repayment you will both be jointly responsible.

This is why it’s important to only go into a joint financial arrangement with people you trust. Discuss what you would do if one person were to lose your job, for example, and could no longer make the monthly repayments.

Credit score

An obvious negative knock-on effect of one of you struggling to keep up with repayments is the impact this would have on your credit scores. Falling seriously behind with your repayments could also result in your home being repossessed.

What if you need to sell?

Whilst joint mortgages – whoever they’re with – always tend to start out on a positive note, it is a very long-term commitment. If one of you were to lose your job, for example, do you have a plan in place which would avoid needing to sell the house?

It’s definitely worth speaking to a broker about different insurance options, such as mortgage protection, that would offer you a level of comfort in each of the different scenarios that you come up with.

Get matched with a joint mortgage broker today

If you’re planning to get a mortgage with friends and family, you’ll want to find a mortgage lender who specialises in customers who are buying under these circumstances. The best way to do that is to find a mortgage broker with the knowledge and expertise you need.

This is where we come in! We offer a free broker-matching service that will quickly assess your needs and circumstances to pair you with your ideal advisor. If you’re looking for a joint tenancy agreement, we’ll match you with a broker who specialises in them, and if you’re after a guarantor mortgage, we’ll pair you with somebody who arranges them every day.

Call 0808 189 0463 or make an enquiry and we’ll set up a free, no-obligation chat between you and a broker who specialises in mortgages with family and friends today.

Ask a quick question

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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