Affordability with existing mortgages

muldesia

Hi,

I already have an existing joint applicant mortgage with somebody. We own 50% of the property each, so pay 50% of the mortgage each.

I wish to take out a new mortgage with somebody else, and keep the existing mortgage.

Will all lenders require me to enter the _full_ amount of the existing mortgage when declaring existing mortgages in the new mortgage application? Or do some lenders recognize that I'm only responsible for 50% of the payments on the existing mortgage, so I only need to put in 50% of the full mortgage amount?

Thanks!

beecher2

You're not only responsible for 50% of the payments - if the other person didn't pay their half, you'd be liable for it.

You need to tell any potential lender the full amount of the mortgage you're liable for

kingstreet

You're responsible for the whole mortgage.

I had a recent case where my applicant was party to a mortgage with three of his friends and the property was in negative equity. He wanted to buy with his partner.

We had a 20% deposit and approached Nottingham Building Society who agreed to take the payments for the current mortgage off the applicant's income like a credit agreement, so they assumed he might be responsible for the full payment if his friends defaulted. The residual income was sufficient to provide good affordability for the new mortgage, so the case proceeded without further problem.

Some lenders may take the amount of the mortgage from your total borrowing power. You need to establish their policy on this issue before you start making an application.