Mortgage for 4 people

freerein

Hi guys

I wonder if you could help

I am looking at moving home, my partner and I have a mortgage at the moment. Our 3 friends are looking to buy somewhere and we are thinking of pooling our resources and getting 4 of us on a mortgage.

I always thought it was only possible to have 1 of 2 people on a mortgage, does anyone know of any companies that would take more than 2 or anyone have any experience of this

Thanks in advance
Freer

Toughluck

Many take 4 people so don't worry. The lender will only take into account the 2 highest earners generally but I know of some that will do 3.25 x joint + 1 + 1.

freerein

Thank you toughluck, that is good to know.

Does that mean 3.25 x the joint then 3.25 for the other 2?

So 3.25 x say £50k on the joint and 3.25 x on £25k and £25k?

??? Too many numbers!!! This way I can work out figures which I didn't think I would be able to!

Toughluck

Let us say all 4 of you earn £10,000 per annum.

3.25 x ([primary + secondly] therefore 3.25 x £20,000) + £10,000 + £10,000. =£85000 total lending. As I said generally it is the 2 highest earners they take into account.

freerein

Perfect - thank you very much

Conrad

It isn't as straigtforward as you might think, and for a brokers it's double the work, double the form filling.

One example of the dozens of questions that would need careful thought;

Many lenders will ask how long the applicant has held a bank account and whilst some give the option to input each applicants details, others would want this question accredited to one applicant only - so which applicant do you chose? The one with highest earnings, or the one with up to date mortgage history?

Furthermore many online applications have been designed for a maximum of 2 applicants only.

What if an online credit card payment is required - who's card will you use?

Who's direct debit will pay the debt?

You will need an experienced broker for this. An inexperienced broker will not forsee all the issues in advance.

freerein

Stuff like that can be easily sorted.

A credit card payment can be made from one card with other parties paying a percentage each.

I see what you mean about the paperwork and that could cause hassle but that's what brokers are for, they are there to help you administrate that, hopefully

As for who's credit card for an initial payment - that can be decided by whoever wants to do it and in this case there are 4 people involved, everyone would pay 25% of that fee each to the person who paid. That's easy.

As for direct debits - simple again it just means a bit of organisation - set up a house bank account. Each person puts an agreed amount per month and the mortgage and all house related costs come out of it.

Easy..... not, really it is