Buying apartment with a friend - joint mortgages?

njokes

Hi,

My first post here, as this forum looks very helpful.

Myself and a friend are looking to buy an apartment in London and want to split the mortgage so we each make repayments on the property. We each have different amounts to put towards a deposit, but would obviously adjust our monthly repayments to reflect this and to make it even.

I understand you cannot have two separate mortgages on a property (unless for same lender?), but potentially we could have a joint mortgage between us. Effectively we need two 400k mortgages, but with different deposit amounts. The property is worth 800k and we have ~240k in deposit. Is it possible for us to get a mortgage on this type of property or is it too ambitious?

Thanks for any advice.

Dave_Ham

Depending on salaries, you can have a joint mortgage and split the ownership on a pre-agreed basis.

I would suggest you also detail the terms of exit, ie person a wants to sell, move out etc. and what the terms of this are.

Have seen this end in tears when not administered appropriately when joint holders fall out, or one finds a partner and wants out.

A decent broker and solicitor can manage this all for you..

Annisele

njokes wrote: »

Effectively we need two 400k mortgages, but with different deposit amounts. The property is worth 800k and we have ~240k in deposit.

That bit puzzles me. If the property is worth £800k, and you have £240k as a deposit - surely you need to borrow a total of £560k? Where did two £400k mortgages come from?

As Dave Ham says, a joint mortgage might be possible depending on your salaries. But you would have "joint and several" liability for the mortgage. In other words, there'd be no such thing as "your half" and "your friend's half" of the mortgage loan - you'd both be liable for the whole lot. If one of you ran away without paying (or lost their job / died/ insert calamity of your choice), the other would have to pay the whole lot.

somethingcorporate

I'd seriously consider not doing this with a "friend". A house and mortgage is a huge commitment (25 years +) and anything can happen in the time - find partners, get married, have kids, get ill etc that could make this situation very complicated.

Keep friends and finances separate - read the lending money to friends and family thread on the loans board to see how messy these things get between blood relatives, let alone just friends.

njokes

Annisele wrote: »

That bit puzzles me. If the property is worth £800k, and you have £240k as a deposit - surely you need to borrow a total of £560k? Where did two £400k mortgages come from?

As Dave Ham says, a joint mortgage might be possible depending on your salaries. But you would have "joint and several" liability for the mortgage. In other words, there'd be no such thing as "your half" and "your friend's half" of the mortgage loan - you'd both be liable for the whole lot. If one of you ran away without paying (or lost their job / died/ insert calamity of your choice), the other would have to pay the whole lot.

Yes you are right, i.e. mortgage for 560k not. I had just halved the whole amount and was thinking of it in total terms, not net.

thank you!