Joint mortgages

Discover what joint mortgages are, who they’re suitable for and the typical lender eligibility criteria.

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A mortgage is probably the biggest financial commitment you’ll make in your life, which is just one of many reasons why you might choose to share the responsibility (and the repayments) with someone else.

A joint mortgage can be taken out with pretty much anyone you like, but the decision to do so shouldn’t be taken lightly, as sharing such a big financial tie can have significant implications for your future.

This guide has been put together to explain exactly what joint mortgages are, who they’re suitable for, typical lender eligibility criteria, and how to secure the most favourable joint mortgage deal with the help of an independent broker.

What is a joint mortgage?

A joint mortgage is a home loan that's shared between multiple people - usually two, but sometimes up to four.

Each owner will be named on the property deeds, is jointly liable for the monthly repayments, and will share in the equity of the property. How the equity is divided up will depend on the type of joint mortgage you take out.

Joint mortgages vs tenants in common

There are two types of joint property ownership: joint tenancies and tenancies in common. Joint tenancies are usually taken out by those in long-term relationships, whereas tenants in common arrangements are more popular amongst friends.

If you have a joint tenancy, each person owns a 100% stake in the property. Everyone has equal rights, and must make decisions collectively. In the event of one person passing away, ownership is automatically passed on to the remaining tenant(s).

Tenants in common each own an individual share of a property, which can be divided up equally or proportionally. Each tenant may theoretically be able to mortgage their own share of the property, and each can leave their share to whoever they want in their wills.

Further reading can be found in our guide to joint tenants vs tenants in common.

Who can get a joint mortgage?

Anyone can apply for a joint mortgage and there are no restrictions on who you can get one with. This could include a partner or spouse, family member(s), friend(s), or even business associate(s).

Depending on your circumstances, there may be limitations as each joint mortgage applicant must meet the credit, age, income, and other eligibility requirements set out by the lender, or risk facing a rejection.

It’s important that you think carefully about who you take out a joint mortgage with, because in doing so creates a financial association between you which could have big implications on your ability to secure finance in the future.

Are joint mortgages different from standard mortgages?

Joint mortgages typically come with similar rates and fees to single applicant mortgages. The application and approval processes are very much the same, and lenders work to similar eligibility criteria.

Where joint mortgages really differ is in the opportunities they offer customers. For many people, getting a sole-name mortgage isn’t affordable. By combining your income on a joint mortgage, you can usually borrow more money and have a wider range of options to choose from.

Having a joint mortgage also allows you to pool your savings towards a larger deposit. Mortgage rates tend to get more competitive (cheaper) as deposit size increases, with every additional 5% usually unlocking lower rates.

For first-time buyers in particular, using joint savings that move you from the 90% loan-to-value (LTV) bracket to the 80%, for example, could make a difference of potentially tens of thousands of pounds throughout the entire mortgage term.

How much can you borrow with a joint mortgage?

As covered, one of the biggest advantages of a joint mortgage is that you'll usually be able to borrow more money than you would applying for one alone. This is because mortgage providers are usually happy to consider applicants’ combined income to dictate lending.

That being said, if your main motivation for taking out a multi-applicant mortgage is to boost your borrowing prospects, bear in mind that most lenders only consider the combined income of the two highest earners, rather than everyone named on the deeds.

Standard lender allowances range from between 3.5 - 4.5x borrowers’ annual income. Some may be willing to offer up to 5, 5.5 or even 6 times your earnings, but this is very much dependent on your circumstances and the lender you use.

Using the 3.5 - 4.5x cap as an example, a sole applicant earning £35,000 may be offered a mortgage of £122,500 - £157,500 respectively. If the same person applied for a joint mortgage with someone earning £30,000 a year, this could potentially boost your borrowing up to £292,500.

In the same vein, these allowances could be reduced if you applied for a joint mortgage with only one income if the borrower with no earnings is classed as a dependent, which will impact the other’s affordability.

Alongside income multiple caps, all mortgage providers have minimum affordability requirements. Affordability is calculated by looking at your combined earnings in relation to your monthly expenses, to determine how much you can realistically afford to pay for a mortgage on top of your existing outgoings.

How much deposit is needed for a joint mortgage?

Another advantage of taking out a joint mortgage is that you and the other applicant(s) can combine your savings for a deposit. Typically, a higher deposit gives you access to cheaper rates and can be a good incentive to lenders if your application presents risk elsewhere (e.g. historic credit issues).

In today’s market a 15% deposit should be sufficient, but the bigger the down payment, the wider the range of lenders, competitive rates and borrowing options are likely to be - including the maximum loan available to you.

While a larger deposit can open up more possibilities for buyers, how it has been sourced can impact your borrowing. Lenders like to see proof of borrowers’ ability to save, so record of savings account transfers can improve applications. Gifted deposits are also widely accepted, although some lenders only allow them if they come from immediate family members.

As joint applicants you're not obligated to put down equal sums of money towards a deposit, but if one person is contributing more than the other(s) it might be something to bear in mind when dividing up the repayments, or deciding whether you want a joint or tenants-in-common arrangement.

How do credit scores impact joint mortgages?

When you take out any type of joint credit agreement, a financial link is created between you and the other individual(s) involved. Before committing to a mortgage with another person, or group of people, it’s therefore important to consider the implications for your credit file - both now and in the future.

When lenders assess a joint mortgage application, they will scrutinise each borrower’s credit file. If one borrower has a low credit score and / or a history of adverse, this can have a negative impact on the entire application - even if the other applicant(s) have outstanding credit.

Similarly, if one person fails to pay their share of the mortgage and it results in a missed payment, this will appear on all borrowers’ credit reports, and could have a corresponding impact on credit scores, regardless of who was responsible.

While it can be more difficult to get a joint mortgage with one bad credit applicant, the good news is that there are still options. It’s even possible to secure a deal if all borrowers have a history of adverse, with the help of a specialist bad credit lender.

Mortgage providers all have different stances on bad credit. Some may be unwilling to approve a joint mortgage if one borrower has a history of missed payments; others might overlook this and still offer you good rates. The same lender may decline anyone who’s been issued with a CCJ; another might consider you if it occurred over 12 months ago.

More often than not, it comes down to how severe the issues are and how recently they happened; lenders are usually interested in the ‘bigger picture’, as well as how your finances have fared since the instance of bad credit was flagged.

Other factors impacting a joint mortgage application

There are a number of other factors that can impact mortgage eligibility, which, depending on your individual circumstances, may be more or less prevalent for a joint application.

Age and joint mortgages

When you enter retirement age, mortgage providers can be more wary about lending to you as your income typically decreases and you’re more susceptible to health problems. To overcome the risk, lenders often impose maximum age caps for the age in which you can take out (usually between 65 - 80) and repay a mortgage (typically 75 - 90), which can impact maximum term lengths available to you.

Provided you can demonstrate your affordability, there are a number of later life lending options you may want to consider if all or both joint mortgage applicants are over the age of 55. If only one applicant is an older borrower, it’s best to ask a broker which lenders are most suitable to approach given your circumstances.

Employment type and joint mortgages

Some lenders favour borrowers who are in permanent, full-time employment, because self-employment carries with it a level of risk - especially if your earnings fluctuate regularly and / or significantly.

While it may be slightly tricker to secure a joint mortgage if one or more applicants work for themselves, there are plenty of willing providers available. Typically you will need to demonstrate your affordability by providing your lender with at least 12 months’ of trading accounts (SA302s), as well as bank statements.

Property type and joint mortgages

While not borrower-related, the type of property you want to buy can make or break a joint mortgage application - even if you and your fellow applicant(s) tick all the right boxes.

Any build that falls outside of the ‘standard construction’ bracket (‘made of bricks and mortar or stone with a slate or tiled roof’) might call for a specialist mortgage provider, as many mainstream lenders are unwilling to take on the associated risk. This also applies to listed buildings and other unique or unusual property types.

What are the advantages of joint mortgages?

There are plenty of reasons why entering into a joint mortgage arrangement with a trusted partner, family member or friend can be an attractive prospect. Some of the advantages include:

A leg-up onto the property ladder

For many people, getting a sole applicant mortgage just isn’t realistic or affordable, so a joint agreement may be their only opportunity to get onto the property ladder.

Shared liability

Getting a mortgage can be expensive in itself, and that’s not to mention the monthly repayments you’ll be responsible for. Sharing the costs can make the process slightly less daunting and more affordable for lots of borrowers.

Boost your borrowing options

Lenders will take into account at least two applicants’ combined earnings, meaning you can usually borrow more money and buy a more desirable home.

Higher deposit benefits

As joint borrowers, you can combine your savings and put down a considerably higher deposit than you’d be able to alone. This can open you up to a wider choice of lenders, more competitive rates and lower monthly repayments.

What are the disadvantages of joint mortgages?

Joint mortgages aren’t without their drawbacks, which is why it’s important to take the time to weigh up the pros and cons before committing.

Shared liability

While it can be advantageous to split the responsibility of monthly repayments, having a joint mortgage agreement means you may become liable for others’ shortcomings. If this results in a missed payment, the lender could take action against all or both of you, which will impact your credit.

Credit implications

Speaking of credit… if one borrower has poor credit, it could inhibit buying options for the other applicant(s). In creating a financial tie to someone with poor credit, this could also be damaging to your own credit report - especially if their actions result in a missed mortgage repayment later down the line.

First-time buyer incentive eligibility

If all applicants are first-time buyers, there are a number of initiatives which could give you a helping hand onto the ladder. But if one joint mortgage applicant owns or has previously owned a property, you may not qualify.

Secure a competitive joint mortgage with the help of a broker

Entering into a joint mortgage agreement is a big commitment, which is why it’s a good idea to run your plans past an independent broker.

Our expert advisors will take the time to understand your circumstances, discuss your options and the possible implications, and if you choose to proceed, point you in the direction of the lenders most likely to accept your application.

Given our position in the market, we have access to exclusive joint mortgage deals you won’t find on the highstreet. As such, we’re committed to securing borrowers with competitive rates, and terms which suit the needs of all applicants.

Give us a call on 02380 980304 or submit an online enquiry, and we’ll match you up with a specialist joint mortgage broker who can help you get the ball rolling.

Joint mortgage FAQs

Hopefully this guide has answered most of your joint mortgage queries, but if you’re still left wondering, we’ve covered some frequently asked questions below. Can’t see the answer you’re looking for? Get in touch.

How can I get out of a joint mortgage?

It is possible to get out of a joint mortgage arrangement, but all co-owners will need to be in agreement with the decision - whether you decide to sell-up, or hand over your share to the remaining owner(s).

Once you’ve agreed the terms, contact your lender and let them know you wish to be removed from the deeds. There may be costs involved, so you’ll need to decide how to divide them up (this is where having a deed of trust can prove useful).

What happens to a joint mortgage if I’ve separated from my partner?

If you have a joint mortgage with a partner you’ve since split up with, you’re both still liable for the monthly repayments until you come to a decision about what to do with your home. Our guide to joint mortgages after a separation outlines your options.

What is joint mortgage protection insurance and do I need it?

There are two types of joint mortgage insurance: joint mortgage payment protection insurance (MPPI) and joint mortgage life insurance.

MPPI will pay out a monthly income for up to 12 months if you or your partner stops earning as a result of illness, having an accident or losing a job. Life Insurance will pay out a tax-free cash lump sum to cover your outstanding mortgage balance should either you or your partner pass away during the mortgage term.

If you’re entering into a joint mortgage agreement with a partner or spouse, insurance is a good idea for peace of mind and to protect you should the worst happen - but it’s completely up to you.

What is a Joint Borrower Sole Proprietor (JBSP) mortgage?

JBSP arrangements help those who don’t have the financial capacity to purchase a property on their own, by allowing another person (usually a close relative) to contribute financially towards the mortgage without being a co-owner.

As the legal owner, you still benefit from 100% ownership of your home. The person supporting the application will not be named on the deeds, isn’t entitled to any gain in the property, and doesn’t have the rights to sell the property. More information can be found in our guide to JBSP mortgages.

Do I need a deed of trust if I take out a joint mortgage?

A deed of trust is a legal document stating the division of ownership of a property. It also details what happens in the event of someone being unable to pay their share of the mortgage, one person wanting to be bought out, or the property being sold.

Having a deed of trust in place can give borrowers peace of mind, and help prevent disagreements later down the line. Having one is specifically recommended for tenants in common, but there’s no reason joint tenants can’t have one.

Should I get a joint mortgage with my parents?

Yes, so long as they meet the eligibility criteria it’s very possible to get a joint mortgage with a parent or other family member.

Bear in mind that many mortgage providers have age limits, so if your parents are retired you may find that your lender pool is smaller. If your parents already own a home, there may also be stamp duty implications.

Will I be able to borrow more money if I get a joint mortgage with multiple applicants?

To some extent, yes, but most joint mortgage providers will only consider the two highest income earners to determine how much you can borrow.

There are lenders out there who will consider taking all applicants' earnings into account, but you’re likely to be more limited in options, and the increased risk of adding extra incomes could increase your rates further.

Can you get a joint mortgage if one applicant works part-time or is unemployed?

Some married borrowers think they’d be better off applying for a sole applicant mortgage if their spouse is unemployed or a low income earner, but provided you meet the affordability criteria overall, this shouldn’t affect your chances of approval.

What’s more, if the second applicant receives benefits, some mortgage providers are happy to accept them (or at least a percentage of them) as income for affordability calculations.

Can I get a joint mortgage if I already own a property?

Yes, if you already own a property it’s possible to buy a second home if your affordability is sufficient. But if only one joint mortgage applicant is an existing homeowner, the whole purchase price may be subject to higher rate stamp duty - unless you have a Joint Borrower Sole Proprietor (JBSP) agreement.

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