Property inflation has outstripped wage increases over the years. Nowadays you will see applicants, particularly First Time Buyers, struggling to afford the current property prices. In this situation, people often turn to the idea of moving in with someone else. Having a joint mortgage will most likely benefit your application, as you have two incomes for the lender to take into account when calculating your maximum mortgage amount.
Having someone to share costs with will always help you out when it comes to your monthly payments. However, it’s not easy to just move in with someone straight away. There are lots of different lender requirements to match and questions to ask yourself before you make a decision. As a Mortgage Broker delivering Mortgage Advice in Sheffield, we get questions about joint mortgages all of the time, here are some of them:
Some lenders will allow up to four names on a mortgage to co-own a property. Remember though, the more names tied into a mortgage deal, the more likely it is that someone could drop out. Let’s say that someone decided to back out, the other joint owners have a legal right to remain living within the property unless a court rules otherwise. Therefore, you need to be very selective about who you buy with.
If the option is available, some homeowners may want to increase the mortgage, although, this can’t be achieved without agreement from all parties. This is why you may want to think about your future plans and how long you are expecting to stay within the property.
As a Mortgage Broker in Sheffield, we usually see that married couples or applicants in a civil partnership go for a joint tenancy. This is where you both have equal ownership of the property so if one applicant unfortunately passes away, the whole property would pass over to the other joint owner.
If you are thinking of remortgaging your property or selling it at a later date, both parties must consent to the idea before you can continue with anything.
Tenants in common is more likely to be chosen if the applicants are relatives or friends. You both have equal ownership of the property but are not forced to do so in shares. This situation normally comes about when one party is making a bigger financial input than the other. You can act individually if you are a tenant in common. For example, you can sell or give away your share of the property to someone else.
This is one of the disadvantages of co-owning a property and it’s more likely to occur when there are more people attached to the property. As soon as you sign on for a mortgage, you have to meet your payments and that goes without saying. However, if one party is struggling to meet their payments and decides to stop paying, the other/others will have to make up for the shortfall. If the payment isn’t made up, you could risk the mortgage falling into arrears which will look bad on your file and could potentially stop you from getting another mortgage in the future.
We always say that you should think of it that you don’t own 50% (any percentage) of the property, you jointly own 100%.
Sometimes, it can be hard to remove a person’s name from a mortgage and this is down to lots of different reasons. The most common reason being that the lender is not certain that the applicant left on the mortgage will be able to keep up with their payments. The lender will never allow someone to remove a name fully knowing that they can’t afford the payments.
A mortgage is a massive financial commitment and that’s why it can be complicated to make changes to it down the line.
Even if you are able to show your lender that you have kept up with your payments since your ex has moved out, they need to be certain that you can afford it, so they will perform an affordability assessment on you. This is the same test that they carry out at the point of purchase. Most lenders aren’t really a fan of allowing applicants to put their mortgage into a sole name, as having more names on a mortgage reduces the chances of arrears occurring as there are more than one sources of income.
If your sole-name mortgage request is declined by your lender, your best option is to speak to a Mortgage Advisor in Sheffield about your current situation. Getting Specialist Mortgage Advice in Sheffield could prove extremely beneficial to your situation and help you get your sole-name mortgage.
We also advise in speaking to family members to see if they can help out. They could possibly help by replacing your ex on your mortgage or by gifting you a lump sum to reduce the amount that is owed.
If you and your partner split up and you are the one to leave the property, you still remain responsible for meeting your payments even if you and your ex have agreed that they will make the payments.
Just like removing an ex’s name off a mortgage, it works the same for you removing yours. Your lender will only allow you to remove your name if they know that your ex is able to afford the payments on her own. An affordability assessment will be done to confirm that your ex is able to meet their payments.
If you have arranged with your partner to send them money each month, you should keep an eye on your own credit report to ensure that they are paying their portion too. If they default, it will damage your own credit score.
If you are still on your ex’s mortgage and you are looking at Moving Home into another property and getting a new mortgage, your lender should take your circumstances into account. Unfortunately, that will mean lenders might not lend you as much as you would like.
Buying a property with anyone always comes with a risk as peoples circumstances change all of the time. We advise that you go into the home buying world with an open mind, if things change unexpectedly, don’t worry, there is usually a way to get around the problem. If you are having a difficult time with your joint mortgage, it may be time to approach a Mortgage Broker and get Mortgage Advice in Sheffield.