Joint Mortgages

nickt1988

Hi Guys,

Me and my girlfriend are currently thinking of getting a house together.
She wants to get a joint mortgage so its 'our' property and i'd rather get a single mortgage in my name as it seems safer if we break up.

I'm 23 on 25k a year and shes 22 on 20k a year.

From some research i've done there are two scenarios (Please correct me if i'm wrong, different banks have told me different things:

1) Say we get a mortgage in my name and pay half of the deposit each, and every month she pays half of the bills, if we we're to break up i'd pay her, her deposit and half of the costs of running the house back, she'd have a nice lump sum and i'd stilll have somewhere to live, i could afford the bills and mortgage by myself.
If we didnt break up, and ended up starting a family then we'd sell anyway and get a bigger place with a joint mortgage.

2) we get a joint mortgage, still paying half of everything each, but if we break up, i wouldn't be able to take her off of the mortgage, so we'd have to sell. If we sold given the current market there is a possibility that we'd be in negative equity so be left with no where to live and owing the bank money.

I need to know the legal side of things, e.g. is scenario 1 legal, would we need to get a solicitor to right up a contract, Are there any other options available to us to give us some security incase it goes tits up.

thanks

Nick

holly_hobby

nickt1988 wrote: »

1) Say we get a mortgage in my name and pay half of the deposit each, and every month she pays half of the bills, if we we're to break up i'd pay her, her deposit and half of the costs of running the house back, she'd have a nice lump sum and i'd stilll have somewhere to live, i could afford the bills and mortgage by myself.
If we didnt break up, and ended up starting a family then we'd sell anyway and get a bigger place with a joint mortgage.

If your income is sufficient to service the mge on its own (subject to lenders criteria), thats fine - but I would advise that a legal document is drawn up stating who provided how much of the deposit and how, in the event of a relationship break down, this will be returned to the donor (& interest to be fair).


From your partners point of view, I would also expect a % of the gain realised in the property over the term too.

Make sure any legal docs are therefore watertight as to who gets what, in which event and how much.

nickt1988 wrote: »

2) we get a joint mortgage, still paying half of everything each, but if we break up, i wouldn't be able to take her off of the mortgage, so we'd have to sell. If we sold given the current market there is a possibility that we'd be in negative equity so be left with no where to live and owing the bank money.

No this is not technically correct...

If your income is sufficient to service the mge on its own and you continue to meet the lenders critera - there should be no problem in releasing your partner from the mge (transfer of equity) if she agrees to the same.


Of course if you don't meet the above criteria (i.e sufficient salary etc) then obviously she can't be released - and the only way to disolve the agreement would be to sell the property. But having a joint mge from outset, doesn't on its own mean that neither party can ever be removed regardless of circumstances.


If there was negative equity, dependant on the amount, you may be able to come to an arrangement with the lender regarding its repayment.


Hope this helps


Holly

lightspeed

I had a joint mortgage in 2006 with my then GF. We split up in 2007 and i bought her out of the mortgage. I had to pay off some capital to enable me to take on the mortgage. The process coast me about 1k in solicitors fees etc...

So, it can be done.

One thing that you should consider:

"She wants to get a joint mortgage so its 'our' property"

So would i if i was purchasing a house and going to be contributing equally to it

"i'd rather get a single mortgage in my name as it seems safer if we break up."

no offense meant by this at all, but, you dont seem to have much confidence in your relationship - therefore, is making such a big financial commitment wise at this stage?

I fully understand your anxiety, but if i was your GF i would be seriously questioning your future having approached this issue.

"Are there any other options available to us to give us some security incase it goes tits up."

Yes, have a joint mortgage

I know i am playing devils advocate but it is important to view both sides of the coin. good luck!!!!

Hannahkw1

If you did break up and had had a joint mortgage, as you're saying you could afford it on your own, couldn't you just buy her out? Can you do that by applying for a mortgage on your own at the time??

Also, if you did break up are you sure you would want to stay in that place? Would it not remind you of her and your relationship?

ViolaLass

If I were your GF, I would be concerned at you getting the mortgage on your own and just promising to hand money over if we broke up. What if you changed your mind? Much more secure, for her, to have a joint mortgage.