Blog Archives

How to protect yourself when buying a home with a partner

21.02.2017

With such a gap between property prices and income it is highly likely that most people will end up buying their first home with someone else – whether it is a partner, friend, parent or sibling. Two incomes and two deposits will mean your money goes a lot further.

However, there are issues to bear in mind when buying property with somebody else. In terms of the mortgage itself, all the typical issues around affordability and meeting the lender’s stress testing still apply. Lenders will look in great detail at each applicant’s income and expenditure, especially fixed outgoings such as personal loans and credit cards. It makes sense for those buying to ensure their finances are in good order before making a mortgage application.

The other issue is that with a joint mortgage the liability for each borrower is joint and several. This means that the lender can pursue each applicant individually and jointly if the mortgage falls into default so if your buying partner doesn’t pay their bit, you are also responsible for it. This element, combined with the affordability issues, means that if a couple split up or a friend wants to go their own way, the lender will need convincing that the remaining borrower can afford the mortgage before the other party is relieved of their obligation. There will also be considerations of buying the other party out and the potential need to release equity to do this. There are plenty of potential pitfalls so applicants need to consider these before committing and seek independent mortgage advice.

Jonathan Harris
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Jonathan Harris

Why this autumn is a good time to remortgage

16.09.2015

I was talking to an estate agent about the housing market earlier this week and he pointed out that there are only about six weeks left to get your property sold before things start to wind down for Christmas. As people come back from holiday and the schools go back, it’s a good time to focus the mind. While you may not be in the market for a new home, everyone could do with taking a look at their mortgage and ensuring they aren’t paying more than they need to.

The good news is that there are still plenty of competitive products on the market with five-year fixed rates available from less than 2.5 per cent, depending on the amount of equity you have in your home. If you are sat on your lender’s standard variable rate and are worried about the potential of an interest rate rise in the not-so-distant future, it may be worth securing one of these deals to protect yourself against higher mortgage payments.

With the mortgage market review rules making it harder to remortgage, it is important that you seek independent advice. Borrowers may be in for a shock as lenders are asking many more searching questions and will want to see much more evidence of income and outgoings than the last time you remortgaged. Our brokers can guide you through the process and ensure you are in the strongest position possible when it comes to making your mortgage application.

To get ready to make a mortgage application, set up a file with 12 months’ bank statements (order replacements for any missing ones; three to six months of payslips; three years of accounts or SA302s or tax returns, if you are self-employed; a recent utility bill and copy of your passport; as well as full and detailed income and expenditure summary. Most mortgage offers last up to six months so plan ahead and don’t leave it until the last minute, or you may end up on a more expensive SVR.

Jonathan Harris
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Jonathan Harris