What kind of Mortgage can i get

Kuztardd

Im very new to the whole thought of mortgages so please be gentle on me if i am asking a silly or uneducated question.

My partner and I plan to buy a place together sometime after april, but not sure what kind of mortgage we could get, or even should ask for.

It's not too straight forward as we have different deposits each.

We plan to buy a place for around £200,000 (£100k each!)

He has £50,000 for deposit and thus wants his monthly amount to be cheaper (he is on the lower wage)
I have only £15,000 for deposit, yet i can afford a bigger a monthly mortgage.

I was just thinking that we could both get independant/individual mortgages.
So if we do buy a place for £200k, I would therefore try and get a mortgage for £85,000, and he would get one for £50,000...

but after speaking to people recently they just look me as though i am making it up..

Soo, my question is this:
Is this a normal thought? can a couple get two seperate mortgages? If not how do things like this get worked out, i.e different deposit amounts, different monthly payments etc..

any thoughts, help or advice would be appreciated.
Thanks in advance

AndrewSmith

Kuztardd wrote:

Im very new to the whole thought of mortgages so please be gentle on me if i am asking a silly or uneducated question.

There are no silly questions, especially if you do not know the answwer to the question you are asking.

Soo, my question is this:
Is this a normal thought? can a couple get two seperate mortgages? If not how do things like this get worked out, i.e different deposit amounts, different monthly payments etc..

Yes, but not on the same property. If you buy a property together then you are deemed by the lender to have a joint equal share in it. Likewise if you default on the mortgage the lender reserves the right to come after you both or each individually for the entire mortgage payment. It is what is called 'joint and severable liability'.

It is down to you both how you divide the individual contributions to the mortgage payment and what whould happen should you split and sell (in relation to the amount of deposit returned to each). All then lender is concerned with is getting the full payment on time each month.

You therefore must take a joint mortgage for the full amount needed.

herbiesjp

You would need to get a joint mortgage

The mortgage payment would have to come out of only one bank account.

So in effect you could open up a joint bank acount and each put your mortgage split into the account each month, and then the mortgage payment would go out.

In terms of deposit and who owns how much, your solicitor would advise you to own the property via a tenants in common arrangement whereny you would own "x" percentage and your partner own "x" percentage

Kuztardd

Ahh, I was kind of expecting those responses :-( even if i was hoping you may something more in my favour.

But thanks anyway, it is appreciated. and what you guys say does make full sense. I'm just getting the idea that i had really oversimplified mortgages in my own head.

I am curious though, what happens when 2 or more friends jointly buy a place, surely they must be in similar circumstances, with different deposits, monthly payments etc.

as for the comment about owning "x-percentage and having a common arrangement with a solicitor".
well, because my partner has a bigger deposit, but on a smaller wage, he would pay much less each month. but only at 25 years, we would have paid the same. so the percentage share would be different ever year. Can things like this be worded in a legal document?

I guess a financial person (or even ourselves) could work out the simple maths to divide how much we should pay each month, maybe?

But, and as much as we do love each other, we are fully aware that some people do, unfortunately, split up. If that happens, I just imagine it must be difficult to work out the formulae to work out who has paid what, in respect to what money was paying off the mortgage, and what was interest money and what was deposit etc
or is that where solicitors get involved and try to get (fight for) the correct amount for the individual

Kuztardd

I am curious though, what happens when 2 or more friends jointly buy a place, surely they must be in similar circumstances, with different deposits, monthly payments etc.

UK007BullDog

Up to 4 people can go on a mortgage, But how to work out who pays what is left up to the respective parties. So You might want to speak to a solicitor and put it in writing how much everyone has to pay every month, so that when you do split up it is clear how much everyone has to pay.

In your case it is even more difficult to work it out as one partner has a higher deposit but can only pay less per month.

To make it simple I would say split the monthly mortgage payments in exactly 50/50. You both would have paid rent for each of your respective places so both rents would have been nearly equal?

You are just going to do your head in with all those calculations. If I were your partner I would get second thoughts of wanting to move in and live like that. You are now a couple wanting to live together, so do it, or are you going to start having 2 water/gas/electricity meters? How much food did one partner eat over his allowance etc? That is where the stress starts over finances and relationships break up.

If you break up then each gets the % share they put in back after all costs have been paid.

Kuztardd

Thanks for your reponse, and shedding light on shared ownership.

or are you going to start having 2 water/gas/electricity meters?

hehe, amusing thought :rotfl:

To make it simple I would say split the monthly mortgage payments in exactly 50/50. You both would have paid rent for each of your respective places so both rents would have been nearly equal?

we've been living together for a while already (everything split 50/50), but when there is a difference of £35,000 deposit it does change things doesnt it?

Im just trying to find out how other people do it, and get multiple views. Surely other people must have been in simlar ways.

Spangled

Two friends of mine (they're a couple) each pay in a certain percentage of their salaries (eg 60%) into a joint bank account to pay for bills, mortgages etc. The guy pays more cos he earns more than his wife. My OH and I will do the same when my OH moves into my place next month. That seems a fair to me.

Re: deposits - I don't think they should affect how much you each contribute towards the monthly mortgage payment. If your OH is putting in a larger deposit then he will gain more if you split up and sell the place (assuming prices go up). eg if he puts in £50k and the value of the house rises 10% and then you split up and sell it, he'll take out £55k (£50k initial deposit plus £5k rise). Get the value of your deposit contributions down in writing.

And if you don't split up, then his larger deposit benefits both of you, which is what being a couple is all about.

Alter monthly mortgage contributions on the basis of current salary for sure, but not on the basis of deposit size - IMO.