Joint Mortgage

Startingout_2

Hi,
I was hoping to get some advice on joint mortgages.

I have been with my girlfriend for several years now, and we are thinking of getting a joint mortgage over the course of the next 6-12 months.

My question is really out of interest and so that we know - what happens to the mortgage if we were to break up? (I don't see this happening, but I would like to be aware of the actions!)

Thanks!

bris

If you put every thing in 50/50, deposit , payments etc, then you take an equal share when selling. If one of you is putting a larger share of the deposit in then have a solicitor to draw something up to protect that if you split up.

sonastin

You are both liable for the mortgage payments. So if you split, you moved out and she stopped paying the mortgage, the mortgage co could come after you for the payment. Any arrears, defaults, etc would still affect your credit rating unless you were taken off the mortgage by agreement between you, your g/f and the mortgage co.

Best thing to do is set out a plan now while you are still able to work together amicably! Work out what is going to happen if you split and a) the house is worth more than you've paid for it (how you split the profit) b) the house is worth the same or c) the house is worth less (i.e. how the debt would be split if you sold in negative equity), etc. Also think about the other scenarios, e.g. if one of you loses your job and you can't pay the same amount towards the mortgage, what happens then? Or one of you inherits a lump sum that you want to put into the mortgage. Speak to your solicitor and get all of it down in writing during the purchase so that it is there to refer to should you end up splitting up.

Computer_User

Don't do it!

If you really must then please please please both get a separate solicitor to act for each of you and get a trust deed drawn up which breaks down what will happen with the house if you do split up. I would say a trust deed is vital in this situation!

Sorry to be all doom and gloom but I am speaking from experience! I bought a house with my ex in 2007. We split up in Feb 2009 and it has been a total nightmare since. We were together for 5 years. We'd bought our 1st house together with big plans for the future - marriage, kids, the works! When we went to buy the house our conveyancing solicitor asked us what we would do with the property if we split. We didn't really think about it to be honest as we were blissfully happy and both presumed that it'd never happen. but we both agreed that if it did happen we'd sell the property. We were putting down unequal deposits on the property and our solicitor advised us to have a trust deed drawn up but it was done by the same solicitor we were using for our conveyancing. I have since been advised that we should have had a solicitor acting for each of us separately. The trust deed we did have drawn up only refers to what would happen if we split and sold the property. It does not consider any other scenario. The problem is we bought the house at the height of the housing market and it de-valued dramatically in the time between us buying and splitting up. It would kill my ex to sell the house and loose so much money on it. So almost 2 years on it is not resolved. He is living there. I am not. I am paying rent to live elsewhere. I am still named on the mortgage and on the property. He cannot change the mortgage or sell the property without my agreement and vice versa. It is extremely difficult as it was an un-amicable split. It took me over a year to get our joint bank account shut as my ex was totally unreasonable about it all. This is another area you should be wary of!

If you are jointly named on a property you are jointly liable for the mortgage etc. This does not mean you are each liable to pay half of it, you are jointly liable. Your mortgage lender is only concerned with getting their money every month. They do not care who pays as long as they get it. They also have the right to access any bank accounts you have with them if you do go into arrears. Once you are jointly tied to someone with a mortgage or bank account you are jointly tied to them for credit scores, even after you split. If you split and one of you starts to run up loads of credit and get bad credit scores - this will also effect the other persons credit score. If you go into arrears on your mortgage this is one of the worst credit scores you can get and can effect your future lending for everything, not just mortgages.

Things may all be blissful now but you do not know what is around the corner. Sorry to sound so negative! But I would not advise anyone to buy a property with anyone else unless they were married. If you do go ahead then I think if you have both put down equal deposits in the first place and are equally paying the mortgage etc this would make things much easier. I think my situation is so complicated as we had unequal deposits put down but then we've paid equally on the mortgage etc.

If you still wanna go ahead then good luck. It is also definitely worth considering mortgage protection insurance, just incase either of you get made redundant etc. On top of everything else, I was made redundant in July. What a great couple of years!

good luck!

hazyjo

What if they don't plan to ever get married? Not everyone does. Anyway, married couples can split up too, y'know! It just makes it even more complicated if you're married then split up and need to sell...

Do you have a joint/equal deposit or is one putting in more than the other?

I'd say if you've never lived together, it might be wise to rent for a year or two before taking on a joint mortgage (even though you have been together a long time - living together is a whole different ball game), but I really don't see how anyone can think only 'marrieds' should take on a joint mortgage together! All relationships are a bit of a gamble as people change over time and you can't guarantee you'll both change in the same way. If the time feels right to buy together, do it. If you have any doubts, don't. You have to see it as a lifetime commitment at the time when you actually buy with someone, even if things don't end up working out.

Good luck.

Jx

Richard_Webster

You are both liable for the mortgage payments. So if you split, you moved out and she stopped paying the mortgage, the mortgage co could come after you for the payment. Any arrears, defaults, etc would still affect your credit rating unless you were taken off the mortgage by agreement between you, your g/f and the mortgage co.

Best thing to do is set out a plan now while you are still able to work together amicably! Work out what is going to happen if you split and a) the house is worth more than you've paid for it (how you split the profit) b) the house is worth the same or c) the house is worth less (i.e. how the debt would be split if you sold in negative equity), etc. Also think about the other scenarios, e.g. if one of you loses your job and you can't pay the same amount towards the mortgage, what happens then? Or one of you inherits a lump sum that you want to put into the mortgage. Speak to your solicitor and get all of it down in writing during the purchase so that it is there to refer to should you end up splitting up.

This is sensible advice. Also having a legal agreement, however well drafted, is much better than not having an agreement, but it is not a magic cure all. The other person may simply refuse to comply with what you consider to be the plain terms of the agreement forcing you into an expensive and stressful court action.

The most important issue is the extent that you trust each other. Do you want to spend the rest of your lives together and are you both equally committed to that? If so why aren't you getting married? Whilst there are a few people out there who have a principled opposition to marriage as an institution, most people don't get married for one of two reasons:

1. They can't afford it - because they have been beguiled by the ridiculously high and unnecessary costs of it suggested by the wedding industry; or
2. One or the other of you is not really sure he/she wants to be committed to the other. If you start discussing the possible scenarios in the way suggested by the post quoted above then if there are possible tensions in your relationship they may come out. If your girlfriend asks why you are thinking like this because she would never leave you then you may start thinking that:

a) she may change her mind later - you are not sure you really trust her or
b) you are not sure you want to be committed and may want a get out later.

If neither of you are sure you want to be committed then don't buy a house together. It is not as much of a commitment as marriage but it is a lot closer to it than, say, going on holiday together. Your finances will be mixed up with each other's to an extent that you will have to trust each other. For instance whatever you agree if one of you walks out and stops contributing to the mortgage payments then the other can decide not to pay either and then you both get a bad credit record.

gb26

Just to add some reassurance as well, I'm currently looking for a house to buy with my boyfriend, we've been together 3 1/2 years now, were not married and not planning to be in the short-term. However I agree this doesn't matter, as far as I'm concerned were both aware of what a big deal this is, we've talked through if we definately want to make this commitment and of course it may all go wrong one day, but then it equally may not.

I think 50% share of everything the deposit, solicitors fees etc is definately the way to go though, a lot easier if anything did happen in the future.

Good Luck to you both