Joint Mortgages

orangestripes

Is it worth getting a joint mortgage in the current housing climate? Would I also gain any advantage if the second applicant was one of my parents who have already paid off a mortgage successfully?

mynameisdave

If you have never nought before and a parent comes on the mortgage with you then you will lose the FTB status (for the purpose of stamp duty exemption, at least). There will also be tax implications.

Yes, it will increase the amount you can borrow but it has it affects.

healthnwealth

A joint mortgage is a home loan, secured by real property, given to more than one party based on their criteria together, before individually. Naturally, a joint mortgage is issued to married couples, but it could also involve other partnerships, such as investors or friends who wish to purchase property together. It have some risks also.

firstaspect

It would allow you to borrow more but other than that there would be no benefits. If you went in with a parent it would also mean you were both liable for mortgage repayments and as said above you wouldn't get any First Time Buyer benefits so would lose out on the stamp duty waiver.

bizarrespook

If you can avoid getting a 2nd applicant do so. Despite having a 40% deposit and clean credit rating, I could not get a mortgage on my own. I had to have a family member go on my mortgage, and my advisor omitted to discuss the implications of this....costing me almost £1500.

Yorkie1

Apart from the issues raised above, two other things occur to me.

1. On sale, your parent will be liable to CGT on any increase in value of their part, as it's not their primary residence.
2. If for any reason you struggled to pay the mortgage (e.g. redundancy, illness), your parent would remain fully liable. Worst case scenario is that their own house could be at risk if the mortgage on your house is defaulted upon.

I don't know enough to say whether your parent's investment in your house would count as deprivation of assets if your parent subsequently needed to go into residential care.

poppysarah

If you are single and can't afford to buy on your own then you can't afford to buy on your own.

Are people so ashamed to say they rent?

Person_one

poppysarah wrote: »

If you are single and can't afford to buy on your own then you can't afford to buy on your own.

Are people so ashamed to say they rent?

I'm currently buying. I'm not ashamed to say I can't afford to rent!

Having said that, I'd advice against using a parent's income to allow you to borrow more. The income multiples are there for a reason, and unless the parent is also going to help with the repayments you could end up really struggling month by month.

Stretching yourself too thin is never a good idea.

OP what are your numbers? Have you already applied for a mortgage and been refused or are you still looking?

Person_one

MadnessOfHPC wrote: »

Joint mortgages are a fantastic way for FTBers to join together to get that first important step onto the ladder. Any one person who doesn't earn enough should consider joining up and combining incomes. You will then get more bang for your buck as with combined salaries the price to income ratio falls. Significantly.

This is great until the two people buying together want to go their separate ways or have different ideas about how to do things.

Niv

poppysarah wrote: »

If you are single and can't afford to buy on your own then you can't afford to buy on your own.

Are people so ashamed to say they rent?

I dont know about being ashamed to say they rent but some people (me included) feel renting is money down teh drain. At least with a mortgage one day (fingers crossed) it will be paid off and I won't have the monthly outgoing of rent/mortgage repayments and so would have more 'spare' cash.

I generally assume that is why people are desparate to buy as opposed to rent?

Person_one

MadnessOfHPC wrote: »

This is why there is never a bad time to jump on the ladder.

Hmm, the flat I'm buying last sold for twice what I'm paying 3 years ago. That wasn't the best time to buy.

Sometimes you just don't realise it was a bad time until a bit later