The decision to purchase a property with a friend or partner can sometimes be a practical way to get on to the property ladder as a First Time Buyer in Manchester or Home Mover in Manchester. Between two people the deposit can be raised faster and bigger than it would be from just a single income on its own, and the costs will be shared. However, it’s important to consider that if one defaults, the other could also be liable for the full mortgage. Here are a few points to look out for from our Mortgage Broker in Manchester:
Up to four people are able to jointly co-own a property. Joint owners have a legal right to stay in their home unless a court rules otherwise. Also, if a person would like to sell or take out extra borrowing against the property all owners will have to give their consent for this to happen. Unless a court order state otherwise.
Joint tenancies are usually favoured by civil partnerships or married couples. If one of the joint tenants dies, then the property immediately is passed to the other owner. In the eyes of the law, joint tenants act like one. This means you can’t remortgage or sell the property without the agreement of the other owner.
Tenants in common are the popular choice for relatives or friends who are buying together. Whilst it still means that you jointly own the property, you do not have to own equal shares. You can act individually, meaning that you can sell or give away your share of the property. Technically you can mortgage your share of the property but finding a lender that will lend in these circumstances would be very difficult. Enforce a sale if the mortgagor was to default would be difficult.
A mortgage lender will state that all borrowers are jointly and severally liable. If one of you stops paying their share of the mortgage, the other(s) will have to make up the shortfall and pay the full amount.
When you buy a home together it isn’t with the intention of splitting up in the future, but regardless of what happens it’s a massive financial commitment and making changes to your mortgage further on down the line can often be a complex situation.
When there are children involved one person will be staying in the home but there may come a time that a person wants to take over the mortgage in their own right which will need efficient Mortgage Advice in Manchester.
The fact that a person has been paying the mortgage without any help from their ex, does not change the fact that the application was processed in joint names. Lenders will not be deterred to following either person who is named on the mortgage in the event of mortgage arrears, even if there is one person trying to upkeep payments.
Before removing a party from a mortgage, the lender will have to be adamant that the remaining applicant can upkeep the affordability on their own going forward and will lead to a full assessment of income regardless of whether you have kept up mortgage payments in the past or not.
Quite often in these situations, there is someone who can step in to replace the ex-partner such as a family member or a new partner. A Mortgage Advisor in Manchester is able to advise through this change.
In the event of a separation/divorce, It’s important to understand that all parties remain responsible for any joint financial commitments. This applies even if a person leaves the family home. This is the case even if an agreement is made between both parties that one person will make all the payments.
The mortgage payment on the old property will be taken into consideration if there is consideration of purchasing a new property in the future. Therefore it’s essential in these instances that a person seeks out Mortgage Advice in Manchester before making an offer. Some lenders are more generous as regards how much they’ll lend than others. At our Mortgage Broker in Manchester, we’ll take this into account when recommending the most suitable lender to apply for a Mortgage Agreement in Principle with.