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60% - 100%
1.19% - 4.32%
Standard Rate (SVR)
3.94% - 4.79%
Variable & 3 ,5 & 10 Fixed Rate
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What do I need to consider?
Getting a joint mortgage with friends or a partner can be one way to get onto the housing ladder, but there are plenty of things to think about before you take the plunge as you will then be bound up in a legal contract of part-owning a house with these people.
The first thing you should do, particularly if buying with friends or family, other than a partner, is to think realistically about the implications of buying into a long term deal. If you are only planning on staying somewhere for a couple of years or you know that you could move location with your job, then it would perhaps be unwise to jointly buy a house with other people as it could cause you financial difficulties in the future. You will also need to think carefully about what might happen if you meet a partner and wish to live with them. There may be restrictions on you renting out your room because of the mortgage details, so you have to be sure that you will be able to keep up your share of the mortgage payments.
What types of joint mortgage agreements are there?
There are two main types of joint mortgage agreement. The first is the type that is most suitable for friends and family buying together as essentially everyone gets their own bit of the house rather than buying it together. This allows up to four people to buy into a property and also allows an unequal split between the buyers who may have different shares of the house, and therefore different shares of the mortgage to pay. Under this type of mortgage if you die your share of the property will automatically go to your next of kin, or whoever you nominate in your will, rather than the other shareholders in the house. Buying someone out of the property can also be fairly complex as in some cases you may find that you are liable to pay stamp duty on the full value of the property.
The other type of joint mortgage agreement is the joint tenancy agreement. This type of joint mortgage is particularly suitable for a couple, whether they are married or in a civil partnership, or even if they are in a stable and committed relationship. In this type of mortgage each person has an equal share of the property, which also includes any profit that is made when you come to sell the property. Should one of you die while you both own the house, the house will then transfer fully to the other person. You are not able to transfer the property to anyone else under either will or intestacy.
What are the risks?
No matter which one you choose, if one person defaults on their payments the rest of the tenants named on the deeds will be liable for the payments instead. If the mortgage payments go into arrears then it is possible to gain a poor credit rating from someone else’s inability to make mortgage payments so make sure you get plenty of legal advice, and preferably a legal agreement to cover these eventualities.