Are you looking to buy a property with someone else and need to apply for a mortgage? If so, then taking out a joint mortgage may be a great option for you. Buying a property with your partner, a family member or even a friend and applying for a joint mortgage is a great idea, especially with the prices of houses on the rise. Applying for a joint mortgage can be easy, but there are a couple of things that you should be aware of beforehand.

Lending eligibility criteria

When applying for a joint mortgage with another person, there are a number of factors that will impact your eligibility to apply for the loan. Your joint mortgage lender will talk you through the lending eligibility criteria, but it typically includes your deposit, employment status and any personal circumstances. When it comes to placing down a deposit for a joint mortgage most lenders will ask for at least 10% of the property’s value. Therefore, you will need to make sure that both you and the person that you are applying for the joint mortgage with can afford this.

Both parties will be evaluated

When two individuals apply for a joint mortgage, both parties will have to submit an individual application and will be assessed by the lender. Similar to a regular mortgage, when you apply for a joint mortgage both you and the other party’s finances will be evaluated. The lender will evaluate both of your incomes, credit scores, outgoing expenses and any previous debt you may have, to see if you are eligible to apply for the loans.

There is shared responsibility

Once the lender has approved both applications and has assessed both parties individually, you will both have to sign the promissory note. This means that you will both become responsible for making repayments to the loan. When it comes to making repayments for a joint mortgage, typically both parties make just one joint monthly payment. This will avoid any confusion and will guarantee that the repayment is paid on time. Not only does both parties signing the promissory note bring joint responsibility of mortgage repayments, but it also means you will now both have shared responsibility of the property that you are purchasing.

You will receive a larger loan

Another factor that you should be aware of when taking out a joint mortgage with another party is that you will actually receive a larger loan. Joint mortgages allow two individuals to borrow more money for the property that they are hoping to buy because two incomes are taken into consideration as opposed to just one. Although receiving a higher loan is extremly beneficial, as it means you will be able to afford the property more easily, it does mean that there will be higher repayment rates.

If you are looking to apply for a joint mortgage or have any further questions, get in touch with GPD Mortgage Solutions today.