Over the years, property price inflation has far outstripped wage increases. These days you will find that mortgage applicants, especially first time buyer in Beverley, are in difficulty when it comes to affording to purchase a home at the prices they are at.
When a home buyer is in this circumstance, they usually explore the option of moving in with someone else as a way to cut costs. A joint mortgage can be helpful for this because you will have two incomes for a mortgage lender to take into account when working out the maximum amount you can borrow.
Sharing the costs with someone can help you out when managing your monthly mortgage payments. On the flip side, it’s not as straightforward as moving in with someone instantly.
The process involves meeting a large amount of mortgage lending criteria and things to think about before you make a decision. As a reputable mortgage broker who has years of experience providing trusted mortgage advice in Beverley, we are asked about a joint mortgage on a regular basis.
Below are the most common questions we get asked and will hopefully help you throughout your mortgage journey.
There is a possibility that you can have up to four names on a mortgage to co-own a property, however, this comes down to the mortgage lender. Please keep in mind though, the more names linked to a mortgage deal, the more the likelihood that someone may drop out.
In the case where someone did drop out of the mortgage, the remaining joint owners are still legally able to keep living in that property, unless a court overruled it. Therefore, you will need to be very careful about who you decide to buy a home with.
If the option is available to you, now and again homeowners with a joint mortgage might think about increasing the mortgage, however, all parties present on the contract will have to agree to this. Again, you will need to consider your future plans for the property.
Through our experience as a mortgage broker in Beverley, we regularly see that married couple or applicants in a civil partnership will go for the option to go with a joint tenancy in which you have equal ownership of the property. In the event that one party passes away, the other owner would get the property.
With this in mind, for those considering remortgaging in Beverley at any point, or selling it down the line, either party would have to agree to this before you resume the process.
You may find that tenants in common usually are applicants who are relatives or friends. You both have equal ownership of the property but are not forced to do so in shares.
Usually, this circumstance happened when one party is making a bigger financial input than the other. If you are a tenant in common. For instance, you can sell or give away your share of the property to someone else.
One of the disadvantages of 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. Obviously, as with any mortgage, you have to keep up with the payments you contractually agreed to.
In the case where one party is finding it particularly struggle to keep up with their monthly mortgage payment and decides to not pay, the other party will need to make up the shortfall.
If that payment isn’t made, you could all end up in arrears, which can negatively impact your credit score and may create issues with obtaining another mortgage in the future.
It definitely is an option to look into if you don’t own 20%, 50%, or whatever the percentage is. You’re a combined entity and own 100% jointly.
Removing a person’s name from a mortgage can sometimes be a difficult process and this is due to a range of reasons.
One of the more popular reasons that we do encounter is that the mortgage lender is hesitant that the applicant left on the mortgage will be able to manage their monthly payments. In the case where you are unable to do so, they are unlikely to allow you to do so.
A mortgage is a significantly large financial commitment and that’s why it can be complicated to make alterations to something that has already been contractually agreed upon.
Even though you may be able to manage to keep up with your payments since your ex moved out, they will still need to carry out an affordability assessment on you (just the same as 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 favour the idea of allowing applicants to put their mortgage into a sole name, like having more names on a mortgage reduces the chance of arrears coming up. This is due to having more than one source of income.
In the circumstance where your sole-name mortgage request is declined by your mortgage lender, we do recommend that you get in touch with a mortgage advisor in Beverley about your situation. Obtaining specialist mortgage advice in Beverley could be beneficial to your circumstance and help you get a sole-name mortgage.
As well as this, we do advise that you speak to family members to see if they are able to help out. There is a possibility that they could 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 are still responsible for meeting your monthly mortgage payments, regardless of if you and your ex have agreed that they will be the ones making the payments.
Similar to removing an ex’s name off a mortgage, the same principle applies to removing your name. The only circumstance where the mortgage lender will only allow you to remove your name is if they are sure that your ex is able to afford the payments through their affordability assessment.
We do find that some may arrange with their partner to send them money each month, however, they do need to keep an eye on your own credit report to ensure that they are paying their portion too. If they default on payments, this can result in harming your own credit score.
In the circumstance where you are still on your ex’s mortgage and are looking at moving home in Beverley into another property as well as getting a new mortgage, your mortgage lender should account for your circumstances. This could result in you not borrowing as much as you’d like.
In any case, there is a risk when it comes to buying a property as situations can change. As a mortgage broker in Beverley, we would recommend going into the home buying world with an open mind. Don’t worry if your plans change drastically there is normally a way to solve your problem.
In the situation where you are having a challenging time with your joint mortgage, it may be best to book a free mortgage appointment with a knowledgeable mortgage broker, to get mortgage advice in Beverley.