Exploring Joint Mortgage Options: What Couples Need to Know Before Buying

Taking the plunge into homeownership with your partner is an exciting milestone, but navigating joint mortgages requires careful consideration. As the property market continues to challenge first-time buyers, combining financial resources often makes perfect sense. However, before signing on the dotted line, here's what every couple should understand about joint mortgages.

Understanding the risks of joint mortgages

When you enter into a joint mortgage, both parties become financially linked and equally responsible for the entire debt - not just ‘your half’. This creates what lenders call "joint and several liability", meaning if one person stops contributing, the other must cover the full payments to avoid repossession.

Your credit scores become intertwined, so if one person misses payments, both credit histories will be affected. Additionally, removing someone from a mortgage later is rarely straightforward and usually requires refinancing.

Is a joint bank account advantageous when applying?

Having a joint account when applying for a mortgage can demonstrate to lenders that you're committed to managing finances together. However, maintaining separate accounts with good individual banking histories can be equally effective. What matters most to lenders is the combined income and outgoings rather than whether they flow through a joint account.

Is a joint mortgage always split 50/50?

Contrary to popular belief, joint mortgages don't have to be equal shares. There are two main ownership structures:

• Joint tenants. Each person owns the entire property equally. If one partner dies, their share automatically passes to the other.
• Tenants in common. Allows for unequal ownership percentages (e.g. 70/30 split) based on contribution. Each owner can leave their share to anyone in their will.

Your solicitor can help establish the most appropriate arrangement based on your circumstances, particularly if one partner is contributing significantly more to the deposit or monthly payments.

Can two people own a house but only one be on the mortgage?

Yes, this arrangement is possible. The person on the mortgage would be the sole borrower, responsible for all repayments, while both parties could be named on the property's title deeds.

This approach might be suitable if one partner has a poor credit history. However, the non-borrowing owner should protect their interests through a Declaration of Trust specifying their contribution and entitlement.

Can I walk away from a joint mortgage?

The short answer is no - not without significant consequences. A joint mortgage is a legally binding contract with your lender. ‘Walking away’ leaves your partner solely responsible for payments and damages both credit profiles.

The proper routes out include:

• Selling the property and repaying the mortgage
• One partner buying out the other by remortgaging
• Obtaining a "consent to let" and renting the property

If a relationship breakdown makes these options challenging, seek whole of market mortgage advice promptly. Mortgage arrears and potential repossession would harm both parties significantly.

Remember, the right joint mortgage structure can provide security and opportunity, but transparent communication about finances and contingency planning are essential ingredients for success.