Co buyers only one needs mortgage

Bart1

I'm considering buying a house with a relative. I will be paying cash for my share, he needs a mortgage.

From threads I've read here in the past but can't find now it was suggested that banks wont lend to co owners unless both are on mortgage?

Is that the case? Any way around it.

My share is coming from inheritance. I have bad credit, def won't be accepted for mortgage.

Thanks in advance

Pixie5740

You and your relative should go and see a mortgage broker. Mortgage lenders get twitchy about giving a mortgage to one person when two are named on the deeds.

Bart1

Thanks.... Twitchy leaves room for hope. Didnt know if it was a set in stone no.

Richard_Webster

Distinguish between borrower and mortgagor.

Borrower is person who borrows money and whose credit etc is checked.

Mortgagor is person (or persons) who owns/own a property and agrees to a charge being put on it as security (the mortgage) for repayment of the loan.

Most lenders require the borrower and the mortgagor to be the same person or persons and so a jointly owned property would have to be mortgaged by both of them and both would be responsible for repaying the loan. The one who put in the cash could have an indemnity from the one who is really borrowing but that is only between them and doesn't affect both of them having a liability to the lender.

A few lenders will contemplate a situation where one person borrows and two mortgage. Both can be evicted if the house is repossessed but if there is a shortfall then only the borrower can be pursued for it.

I think you may be able to get such loans from HSBC/First Direct and Barclays/Woolwich but the mortgage advisers amongst us will be able to confirm this or otherwise.