Joint Mortgage query

Indigo73

Hi

I’d appreciate thoughts and advice on the following.

I’m 42 years old, earn £35,000 pa, have no debts but no deposit saved and I’ve always rented. I’d like to get onto the property ladder but, given that it will take a considerable amount of time to save a deposit and with each year that passes the number of years’ mortgage term I would be eligible for decreases increasing the monthly repayments accordingly, it’s not a great situation!

However, a friend of mine has just made me a proposal! He’s also 42, a company director on £60k, owns his home and has £20k that he wants to invest in property. He was going to buy a property where he lives and rent it out but has offered to buy in Windsor, where I live and work, and take out a joint mortgage with me. We’d be looking at a £200,000 property, he would put his £20k in as deposit and would have a £80k mortgage share and I’d have a £100k mortgage share. We’ve calculated the income we would need from the property to cover the mortgage repayments, insurance, maintenance, ground rent (if applicable), etc. and to give my friend a 4% return on his £20k, which is what it’s currently earning. The plan would be that, rather than rent it out, I would live there and pay the amount that we’ve calculated we’d need. My friend would therefore get his 50% share of any resale profit and not have the hassle and cost of finding a tenant and I’d be paying what I’d be paying anyway in rent but have a foot on the property ladder and 50% of any resale profit.

I’d be interested to know if:
a) this seems like a good idea
b) we’d be likely to get a mortgage
Many thanks
Indigo

observations_from_a_hill

Sounds like a recipe for disaster. If his business/marriage/mental health break down at any time, you are left solely responsible for £180k mtge debt. Could you afford that?

bigmatt1174

observations_from_a_hill wrote: »

Sounds like a recipe for disaster. If his business/marriage/mental health break down at any time, you are left solely responsible for £180k mtge debt. Could you afford that?

Maybe need clarity but from the title of the thread it would appear they are looking at a joint mortgage, so not solely responsible (not legally anyway). However isn't this just like entering into any joint mortgage - all of the above can happen! Probably more likely as well!!
If you do go down this route make sure that you look at tennants in common and set up the appropriate protection policies to deal with any early death so all can be sorted.