For those that are keen to get on the property ladder, but struggling to find a way due to high house prices and the need for a large deposit, the opportunity to buy a property with friends could be the solution.<\/p>\n
Most lenders offer joint mortgages for two people, but some now offer the opportunity for\u00a0up to four people to secure a joint mortgage together. While the ability to buy with friends is a great step forward for the mortgage industry, there are\u00a0several\u00a0important considerations for borrowers.<\/p>\n
Whether you apply as a pair or a group of\u00a0up to\u00a0four,\u00a0the same mortgage deals and rates are available,\u00a0although\u00a0the choices are more limited for groups. Currently,\u00a0Barclays, Lloyds, Metro Bank, Santander and Virgin Money\u00a0are the only lenders offering joint mortgages for up to four people.<\/p>\n
Borrowers\u00a0need to\u00a0be aware that lenders will assess\u00a0affordability\u00a0levels\u00a0differently. One of the biggest issues is\u00a0that some\u00a0lenders will only\u00a0take into account\u00a0the two highest incomes. While this probably less of a problem for a group of high earners, for\u00a0borrowers\u00a0that need a loan\u00a0that takes into account\u00a0all of their salaries, it might be harder to secure the desired loan amount.<\/p>\n
Credit scores will also impact a groups chances of securing a mortgage, so it\u2019s worth checking that each\u00a0borrower\u00a0scores well.\u00a0If one person\u2019s score is not quite up to scratch,\u00a0take steps to improve their score before applying for a mortgage. If even one applicant in the group is considered unable to pay their share,\u00a0it is unlikely the mortgage application will be approved.<\/p>\n
According to online mortgage broker Trussle,\u00a0a group of four first-time buyers could pay on average an extra \u00a31,834 on a two year fixed rate, based on a \u00a3250,000 property on an LTV of 80%,\u00a0\u00a0when compared to the payments of a two-person joint mortgage.<\/p>\n
However,\u00a0the\u00a0smaller individual monthly mortgage payments are one of the biggest reasons people enter into a group joint mortgage.\u00a0\u00a0The extra cost to secure a mortgage could be considered a small price to pay to get into your own property.<\/p>\n
While buying with friends might seem like an attractive idea, what happens if it all goes sour or someone wants to move on?\u00a0\u00a0Being\u00a0upfront,\u00a0honest\u00a0and clear about the expectations on each party\u00a0at the outset\u00a0is fundamental. Get a contract agreed at the start to stipulate the notice all parties need before the property can be sold, should one party want to move on.<\/p>\n
Finally,\u00a0you have a property,\u00a0and four of you have a stake in it. What happens if one of you dies? This is where groups considering a joint mortgage should get legal advice on whether they\u00a0buy as\u00a0joint tenants or tenants in common.<\/p>\n
As joint\u00a0tenants,\u00a0ownership passes\u00a0onto the remaining owners.\u00a0As tenants in common,\u00a0each person can bequeath their\u00a0share\u00a0of the property in their will.\u00a0 Tenants in common may be more appropriate where each buyer contributes a different deposit so they can apportion specific shares.<\/p>\n
A joint mortgage could be a\u00a0logical\u00a0choice for those eager to get on the property ladder, but living and buying with friends\u00a0could potentially be fraught with problems. Do the research, get 100% commitment from everyone involved\u00a0and take expert advice. Importantly, enter a joint mortgage with the expectation that things are likely to change and have a plan for what will happen when they do.<\/p>\n
This month\u2019s podcast will be covering everything you might need to know about Property Management &\u00a0Mortgages<\/a>.\u00a0We will be joined by Matt Eastham from Easthams & Co \u2013 Property Management and\u00a0Marcus\u00a0Docker from Visionary Finance. Giving us their\u00a0insider\u2019s view on everything you need to know in the\u00a0property management and\u00a0mortgages<\/a>\u00a0markets. Hosted by our very own Katie Walker.<\/p>\n Covering our some of clients top questions and the latest changes in the\u00a0UK property<\/a>market. Market trends. Section 21. Letting fee bans. Generation Rent. Buying a property in a LTD company.<\/p>\n","protected":false},"excerpt":{"rendered":" For those that are keen to get on the property ladder, but struggling to find a way due to high house prices and the need for a large deposit, the opportunity to buy a property with friends could be the solution. Most lenders offer joint mortgages for two people, but some now offer the opportunity… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":5024001,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26,6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/5023999"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/comments?post=5023999"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/5023999\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media\/5024001"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media?parent=5023999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/categories?post=5023999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/tags?post=5023999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}