Over the years, property price inflation has far outstripped wage increases. It’s common to find mortgage applicants, especially first time buyers in Nottingham, find it difficult to raise enough funds to purchase a home with the current property prices.
In this circumstance, many home buyers will explore the option of moving in with someone else as a means to reduce costs. A joint mortgage can be a huge benefit with the mortgage lender taking two incomes into account when it comes to calculating the maximum amount you can borrow.
Furthermore, you have the chance to split costs making monthly mortgage payments more affordable for you. On the other hand, it’s not as straightforward as moving in with someone instantly.
The process will involve lots of mortgage lending criteria that you will need to meet and questions to ask yourself prior to making the big decision. Our extensive experience as a Mortgage Broker in Nottingham has given us the opportunity to answer many questions regarding joint mortgages.
Check out the video below which will answer a range of popular questions that will hopefully help you with your mortgage journey.
There is a chance to have up to four names on a mortgage as a way to co-own a property, however, this all boils down to what your mortgage lender offers.
In the circumstance where someone decides to get out of the mortgage, the joint owners left in the property will have a legal right to remain living in that property, except if a court overrules it. Therefore, it’s best to be wary of who you decide to buy a home with.
If the options are available to you, homeowners with a joint mortgage may look to increase the mortgage, however, all parties mentioned on the contract must agree to this. With this in mind, you need to think about the property’s future plans.
As a Mortgage Broker in Nottingham, we usually find that married couples or applicants in a civil partnership will decide to go with a joint tenancy, which means you have equal ownership of the property.
If you are looking into Remortgaging in Nottingham at some point in the future or looking to sell further down the line, each party will need to agree before you carry on with the process.
Tenants in common are generally popular amongst applicants that are relatives or friends. With this, you both have equal ownership of the property but are not obliged to do so in shares.
This normally occurs when one party is making significantly more money than the other. As a tenant in common, you can act individually. For instance, you can give away your share of the property to someone else.
One of the drawbacks to being a property co-owner is if a party stops paying their share of the property, which is sadly more likely with multiple people attached to a property. Just like with any mortgage, you need to keep up with the payments you contractually agreed to.
In the case where one party is struggling to keep up with their monthly mortgage payment and decides it’s best to stop paying, the other party will need to make up for this payment.
You are at risk of ending up in arrears if the payment isn’t paid which, in turn, may have a negative effect on your credit score and can affect your chances of getting another mortgage in the future.
The way you view this type of mortgage is that you don’t own whatever the percentage you pay but you’re a combined entity and own 100% jointly.
In some cases, it can be a difficult process to remove a person’s name from a mortgage and this is due to a range of reasons.
Through our time providing open and honest Mortgage Advice in Nottingham, we have found that the main reason is that the mortgage lender is not confident in the applicant being solely on the mortgage and will struggle to keep up their monthly mortgage payments. If you are unable to do so, they are unlikely to allow you to do so.
You have got to remember that a mortgage is a very large financial commitment which is why it can be difficult to make changes to something that has already been agreed upon.
Regardless of whether you have managed to keep up with your payments since your ex has moved out, it’s required that a mortgage lender should carry out an affordability assessment on you (similar to what they did at the point of purchase), to make their own judgement on whether or not you can afford it.
A large number of mortgage lenders don’t particularly favour putting applicants on their mortgage as a sole applicant. This is because having more names on a mortgage lowers the chance of arrears occurring. By doing this, there is more than one source of income.
In the circumstance where your sole-name mortgage request is declined by your mortgage lender, we do strongly recommend speaking to an expert Mortgage Advisor in Sheffield about your situation. It could be incredibly beneficial to get seek Specialist Mortgage Advice in Nottingham and help you get a sole-name mortgage.
As well as this, we do advise you to speak to family members to see if they can help. One way they may be able to help your situation is by replacing your ex on your mortgage or through a gifted deposit which could help reduce the amount you owe on the mortgage balance.
In the unfortunate case where you and your partner split up and you are the one moving out of the property, you still need to keep up with paying your monthly mortgage payments, regardless of whether you and your ex have come to an agreement that they will be the one making the payments.
Similar to removing an ex’s name off a mortgage, it’s the same concept as removing your name. Your designated mortgage lender will only allow you to remove your name if they are confident in your ex being able to afford the payments through carrying their affordability assessment.
Sometimes, applicants will arrange with their partner to send them money each month, therefore, you need to look at your own credit report to see that they are paying their portion as well. There could be the potential risk of payment to default which has a negative impact on your own credit score.
For applicants that are still on their ex’s mortgage and are looking at moving home in Nottingham, into another property and obtaining a new mortgage, your mortgage lender will take into account your circumstance. This could result in you not being able to borrow as much as you’d like.
There are always potential risks when it comes to buying a property with anyone because of a change in circumstances. Here at Nottinghammoneyman, we do advise that you approach the world of home buying with an open mind. Don’t panic if your plans change unexpectedly, it’s very likely there will be a solution to this.
If you are having trouble with your joint mortgage, our team could help! Book a free mortgage with one of our friendly advisors to get Mortgage Advice in Nottingham. Simply get in touch with our team or book online today.
Last Edited: 26/09/2022