A joint mortgage is a loan by a bank or building society that is secured on a property –Freehold House or Leasehold Flat taken out in the names of two or more people.
A joint mortgage means you are both responsible and liable for the mortgage payments, “jointly and severally”. If one of you is unable to contribute for whatever reason then the other must cover the whole of the mortgage and not just their share.
Purchasing with a Partner
When purchasing a property with a partner it is important to remember that it is a commitment, not just to each other, but to the mortgage lender as well.
When couples pool their income it can enhance their buying power, however there are many things to consider.
When you purchase a property with another person you can either buy as “Joint Tenants” or “Tenants In Common”. This choice can have profound effects in the future.
“Joint tenants” means that you both own 100% of the property. If one person dies the other automatically inherits the asset.
“Tenants in Common” lets each individual bequeath their half of the property to each other, or another party. This method of ownership is often a better tax planning tool.
You also need to consider carefully how to protect your home if something should happen to your partner.
When taking a mortgage there are also the usual questions, such as the type of loan you should go for fixed or tracker, for example.
In the current market lenders are far stricter with their lending criteria and because of this, the knowledge and contacts of a mortgage broker can be the difference between getting a mortgage and then getting the most competitive one for your circumstances.
When applying for a joint residential mortgage, it’s vital to not only get a competitive interest rate but also to find a product that suits your lifestyle and needs.