When you decide to get a mortgage with another person – both your incomes can be taken into account in assessing how much you can borrow.
It is absolutely vital you are all very clear where you stand from a legal point of view before you buy a house and get a mortgage with another person or persons.
Up to four people can be joint legal owners of a property and if you are a joint owner it means no one else can:
- Force you to leave unless they get a court order;
- Sell the property without getting your agreement or a court order;
- Take out a loan against the property without your agreement;
Before proceeding with any joint arrangement, you should discuss the options with your solicitor.
You will likely have to sign a written agreement confirming what you have decided before the purchase goes ahead.
There are two different ways to jointly own a property, the difference being, what will happen to the property if one of you dies.
This means you have equal rights to the whole of the property – many couples who are married or in long-term relationships choose this option. This agreement means that if you die, the other joint owner automatically inherits your share of the property, regardless of anything that is said in your will.
Tenants in common
This is the option usually chosen by business partners; couples in new relationships and friends and/or relatives who are buying together. This means you each own a specific share of the property, not necessarily an equal share. If you die, your share of the property doesn’t automatically pass to the other legal owner(s), but to whoever is named in your will or, if you haven’t got a will, to your next of kin. If you want to leave your share of the property to the other legal owner(s), you will have to state this in your will. This type of agreement can be transferred into a joint tenancy, but only if the other owner(s) agree to it.