Property price inflation has far outstripped wage increases over the years. Nowadays you will find that mortgage applicants, particularly first time buyers in Sheffield, are struggling to afford to purchase a home at the prices they are.
When a home buyer is in this situation, they will often look at the idea of moving in with someone else, to cut costs. Having a joint mortgage will most likely benefit you, as you will have two incomes for a mortgage lender to take into account when calculating the maximum amount you can borrow.
Having someone to share costs with will always help you out when it comes to being able to afford your monthly mortgage payments. That being said, it’s not quite as simple as moving in with someone straight away.
There is a lot of mortgage lending criteria to meet and questions to ask yourself before you make a decision. As a mortgage broker that prides itself on providing mortgage advice in Sheffield, we get questions about joint mortgages all of the time.
Below we have answered a variety of these questions, in hopes it will aid you on your mortgage journey.
Depending on the mortgage lender, you can have up to four names on a mortgage in order to co-own a property. Please remember though, the more names tied into a mortgage deal, the higher the likelihood that someone may drop out.
If someone theoretically did drop out of the mortgage, the remaining joint owners will have a legal right to keep living in that property, unless a court overruled it. As such, you need to be very careful about who you decide to buy a home with.
Providing the option is available to you, occasionally homeowners with a joint mortgage may wish to increase the mortgage, though all parties present on the contract will have to agree to this. Once again, you’ll need to give careful thought to future plans regarding the property.
As a mortgage broker in Sheffield, we generally see that married couples or applicants in a civil partnership will choose to go with a joint tenancy, wherein you have equal ownership of the property. If one party passes away, the other owner would get the property.
That being said, if you were considering remortgaging in Sheffield at any point, or selling it down the line, both parties would have to agree to this before you continue with the process.
Tenants in common are more commonly found 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 is seen 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.
One of the downsides to being a property co-owner, is if a party stops paying their share of the property, which is unfortunately more likely with multiple people attached to a property. Of course, as with any mortgage, you have to maintain the payments you contractually agreed to.
If one party is finding it particularly difficult to maintain their monthly mortgage payment and decides they’re better off stopping paying, the other party will have to make up the shortfall.
If that payment isn’t made, you could all end up in arrears, which harms your credit score and subsequently your chances of obtaining another mortgage in the future.
You should always look at it as you don’t own 20%, 50%, whatever the percentage is. You’re a combined entity and own 100% jointly.
Sometimes, it can be a difficult process to remove a person’s name from a mortgage and this is down to a variety of reasons.
The most common reason we come across is that the mortgage lender is unsure that the applicant left on the mortgage will be able to maintain their monthly mortgage payments. If you are unable to do so, they are unlikely to allow you to do so.
A mortgage is an incredibly large financial commitment and that’s why it can be complicated to make changes to something that has already been contractually agreed upon.
Even if you believe that you have kept up with your payments since your ex has moved out, they will still perform an affordability assessment on you (like they did at the point of purchase), to make their own judgement on whether or not you can afford it.
The majority of mortgage lenders don’t really like to allow applicants to put their mortgage into a sole name, as having more names on a mortgage reduces the chances of arrears occurring. This is because there are more than one source of income.
If your sole-name mortgage request is declined by your mortgage lender, your best option is to speak to a mortgage advisor in Sheffield about your situation. Getting specialist mortgage advice in Sheffield could be greatly beneficial to your situation and help you obtain a sole-name mortgage.
We also advise in speaking to family members to see if they are able to help out. They could possibly help by replacing your ex on your mortgage or by gifting you a lump sum that could help reduce the amount you owe on the mortgage balance.
If you and your partner split up and you are the one to leave the property, you still remain responsible for meeting your monthly mortgage payments, even if you and your ex have agreed that they will be the one making the payments.
Just like removing an ex’s name off a mortgage, the same principle applies to removing your name. Your mortgage lender will only allow you to remove your name if they know that your ex is able to afford the payments, via their affordability assessment.
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 on payments, it will harm your own credit score.
If you are still on your ex’s mortgage and you are looking at moving home in Sheffield into another property and getting a new mortgage, your mortgage lender should bear your circumstances in mind. This may mean you can’t borrow as much as you’d like.
Buying a property with anyone will come with a risk, as circumstances always change. We advise that you go into the home buying world with an open mind. If your plans change unexpectedly, don’t worry, there is usually a way to solve your problem.
If you are having a difficult time with your joint mortgage, it may be time to book a free mortgage appointment with an expert mortgage broker, to get mortgage advice in Sheffield.
Last edited 05/09/2022