Should I put another person on mortgage just to get a nicer place?

AliMalice

Hello moneysavers,

I've moved to a new area and I'm looking to buy a place but there's not much choice within my budget. I'm debating whether or not to put someone else on the mortgage to help me get the kind of property I want. I have someone in mind - he lives rent free and doesn't have many financial commitments. He doesn't earn very much but according to a financial adviser his income could bring my budget up from £150k to £180k (these are both best case scenario). This is all subject to checks, etc that haven't gone ahead yet - I first need to decide on whether I'm going to proceed independently or with the help of this person. We have talked about it, and he is fairly happy for me to put his name on the mortgage if it helps (we have a child together and he wants myself and our son to live in a nice place). But we need to know more information first (and we really do need to sit down and think about it!).

I know when the time came to 'buy him out', the mortgage lender would insist on me earning enough to pay for the mortgage independently. My wages are supposed to climb considerably over the next few years (I know best laid plans and all that, but fingers crossed). How would it work for my son's father though - when the time came, would he be allowed to take what he had invested plus (or minus) any equity? And then would I have to get a larger mortgage to cover this shortfall? I earn the most money and the deposit is all mine (from the sale of my last home which I bought independently).

I am hoping that this would help him raise funds too. He probably wouldn't be contributing very much though, so would it look bad on his credit rating if he didn't have much to show for having been on a joint mortgage?

If someone could offer me any advice, I'd be grateful.

Yorkie1

I think it is a bad idea, personally.

You will be financially tied to each other for as long as it takes you to earn enough to satisfy lenders that you are worth lending enough to get the mortgage alone. Life is never predictable, expenses go up, and you cannot tell what the future holds.

It will probably stop him getting a mortgage of his own in future - may even impact him getting other credit - because he will be treated as liable for your mortgage first.

If either of you has credit or financial problems in the future then it will impact the other as you will be financially associated.

Really, don't do it.

mrginge

For you it's probably a bad idea.
For him it's definitely a bad idea.

AliMalice

Thanks guys, you confirmed our doubts. I'll hunt for a place I can afford on my own instead. It will take longer to climb the ladder but I just need to be patient!