Joint Mortgage With Parents
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Joint Mortgage With Parents
Charlie Connolly explains how a joint mortgage with parents works.
Can I get a joint mortgage with my parents? How does it work?
Yes, you can get a joint mortgage with your parents. The main difference is there will be two or more applicants, rather than one.
Things to consider are that most lenders will have a maximum age where the mortgage must end, which is typically 70 or 75 if earning income, or 80 if retired. This could have an impact on your monthly repayments and what you can borrow.
Will I miss out on a First Time Buyer discount if I get a joint mortgage with my parents?
Yes. If you’re buying with parents who already have or own a house, then you could miss out on the First Time Buyer stamp duty discount. However, there are certain mortgages available, such as Joint Borrower Sole Proprietor, which would still mean that you can still get that stamp duty relief.
What’s the difference then between joint tenants and tenants in common?
Joint tenants is when two or more people own a property equally. It doesn’t matter if one person contributed all the deposit, both the owners have equal rights to the whole property.
With tenants in common, two or more people own a distinct share of the property. For example, one person might own 60% and the other owns the remaining 40%.
What deposit do you need for a joint mortgage with parents? How much can I borrow for a joint mortgage with parents?
The deposit amount is the same as a normal mortgage. The maximum you could borrow is 95%, which means you have a 5% deposit.
Ultimately, how much you can borrow depends on your income and your parents’. It is also affected by whether they’ve got an existing mortgage, as well as both of your outgoings. From there, together with your deposit, you can get a guideline to what you can borrow.
What eligibility criteria do we need to meet on a joint mortgage with my parents?
The main criteria to be aware of is affordability, maximum age, earned income and retirement income, as this will impact your affordability and your monthly payments.
If you have parents who also have a residential mortgage, this would also be taken into account for affordability. That’s an important thing to consider.
Does a joint mortgage with parents have to be 50-50?
No, it doesn’t. You can choose to have the mortgage how you like. The typical ownership type is joint tenants, as we just talked about, where you have equal rights to the property.
However, if you want to have a distinct share in a property, then you can also have the property at a different split by choosing ownership as tenants in common. You would discuss this with your solicitor and make the decision from there.
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How will my parents’ ages impact our ability to get a joint mortgage? What’s the maximum age?
The maximum age you can go to if your parents work is typically 70 or 75. If you’re using retirement income, you can typically go up to age 80.
If you’re restricted on your term length due to your parents’ age, this could impact the maximum borrowing and also affect your monthly repayments. Typically it would be a shorter term than if you were buying with a partner.
Can my parents pay the full deposit and be named on a joint mortgage? Would this be classed as a gifted deposit?
Yes. Your parents paying the full deposit is not a problem. If they are named on the mortgage, the deposit wouldn’t be classed as gifted, as they would own a share in the property.
What happens if you have a joint mortgage with parents and they die?
It’s not a nice topic, but if something were to happen to your parents under the mortgage, it would then become yours. It’s still your responsibility to make those repayments.
You could look to put a life insurance policy in place to pay out in the event of death. This could either help towards the mortgage balance or pay it off completely.
Is getting a joint mortgage with my parents a good idea? What are the advantages and disadvantages?
The advantage is that they help their child get on the property ladder, which is always nice. Schemes such as Joint Borrower Sole Proprietor are available to help keep stamp duty costs down.
One disadvantage is the potential restriction in term length due to the parents’ age; and monthly repayments are likely to be higher due to the restriction in term.
How do you apply for a joint mortgage with parents? What’s the process?
There’s no difference in the mortgage process. You just apply as a joint mortgage with parents as you typically would. You would see your mortgage broker and we would talk you through the process. We would complete a fact find, obtain documentation from you and apply for the mortgage as normal.
How can a mortgage broker help?
A mortgage broker can guide you in the right direction in terms of using schemes to save costs – such as the Joint Borrower Sole Proprietor mortgage.
We also know lenders’ criteria in terms of the age you can go up to, based on earned income and retirement income. That ensures you’re getting the most suitable deal for you and your parents.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
Useful Links
- First Time Buyers
- First Time Buyer New Build Mortgage
- Self-Employed Mortgage First Time Buyer
- First Time Buyer Joint Mortgage
- Do I need a Guarantor?
- Joint Borrower Sole Proprietor Mortgage
- Agreement in Principle
- How Much Deposit Do You Need For A Mortgage?
- First Time Buyer Mortgage Bad Credit History
- Interest-Only Mortgage for First-Time Buyer credit history
- Gifted Deposit Mortgage
- Multi-Applicant Mortgage
- Joint Mortgage With Parents
- What is a product fee on a mortgage?