Shared Tenancy Mortgage advice please.

MrBitey

Hello there,
I am soon to be married and my fiancee and I want to get the best house we can for our money...
We have been discussing buying a house with a Joint Tenancy. Basically, she is able to buy half the house herself outright. I would get a mortgage for the other half of the house and pay that myself.

My question is: what sort of deposit would I need to pay (if any). I am not sure if a deposit might not be needed as we will have paid for half of the house already or if I will need to find 10% of my half of the cost of the house(which is doable if I manage to sell my flat).

It would be great if I can get away with a 100% mortgage with no deposit as I am thinking about possibly keeping my current flat (ex local authority), increasing my mortgage to buy the 25% I don't own (it's a key worker shared-ownership thingy) and renting it out through the council...

Anyone have any good advice or info for me?
Thanks very much in advance...

MrB

kingstreet

If you plan to buy a property in two names, you have the choice of a joint tenancy, or a tenancy in common. The former means if one owner dies, the deceased's share automatically passes to the survivor. A tenancy in common sees the deceased's share pass to the estate of the deceased and distributed according to their will.

In the circumstances you describe, with your partner paying the deposit you would still need a joint mortgage. The lender would not have good security if only one borrower was named as it would be practically impossible for it to sell half a house. On this basis, you would not need a deposit on top of hers.

You will however be able to reach a separate agreement with your partner to protect her initial investment should you split up. Speak to the solicitor who handles the purchase.

If you decide to keep a property with a mortgage, you will find some lenders will take the size of the mortgage off your borrowing power. Others treat a mortgage like a credit commitment and deduct the monthly payments from your monthly income. A few may allow one BTL in the background and ignore it.

Do you want to be a landlord and accept the issues that go with it?