Created by: Dave Harland | 23 September 2019

How a joint mortgage affects your finances

A joint mortgage is a loan taken out by two people who want to buy a property together. Everyone named on the mortgage is responsible for repayments, but you can choose how you share the equity.

Joint mortgages are usually taken out by couples, but they’re also available to civil partners and unmarried couples. You could also buy a home with:

  • Friends and family members who you’re going to live with
  • A business partner who wants to invest with you
  • A friend or family member who wants to help you afford a property

How much can you borrow with a joint mortgage?

You can usually borrow more when you take out a joint mortgage because your combined income is higher than what you earn individually.

Joint mortgages have the same fees and charges as standard mortgages. But, if you can save a higher deposit, you should be offered the best interest rates.

What you need to know before taking out a joint mortgage

1. When you borrow with someone else, they’ll become a financial associate

Applying for credit with another person will show on your credit file, and you’ll be financially linked with that person. If you’re financially linked to someone with a low credit score, it may have an impact on whether or not you can get credit in the future.

2. Getting married to someone doesn’t create a financial connection

You’ll only become financially associated with someone if you take out a form of joint credit. Being a guarantor for someone can also create a financial connection.

3. You aren’t financially linked for life

Information on your credit file stays there for six years even if you’ve closed the joint credit down. But if you’re no longer sharing financial accounts with someone, you can ask for them to be removed from your credit report.

4. Check your credit report before applying for joint credit

If you can, you should try and get into the habit of checking your credit report regularly. It’s good to know where you stand and make sure that your information is correct. You can improve your credit score in a few ways, including joining the electoral register, paying bills in your name and getting your own credit card.

5. Joint and several liability

When you sign a joint credit agreement, you’re both agreeing to joint and several liability. This means that you’re both accepting responsibility for the entire debt, not just your half. To put it simply, the debt will have to be paid in full, even if one person can’t or won’t pay their share.

In a nutshell

  • If you apply for credit with someone, you’re financially linked and this will be recorded on your credit file.
  • It won’t affect your credit score but may affect your chances of getting credit in the future.
  • It’s a good idea for everyone you’re borrowing with to check their credit score before applying to borrow.

A joint mortgage can be very useful if you’re looking to buy a property that you wouldn’t be able to afford on your own. But, as with any credit, think about whether you’ll be able to pay it back and research every option before applying.

Are there any alternatives?

Yes. FriendlyScore is a modern credit score which enables you to check your score without leaving a footprint on your credit bureau account. By sharing your own financial data, FriendlyScore is able to calculate a credit score which can then be used by lenders to get you the best price on a mortgage. By not relying on credit bureaus, this puts you in control and won’t affect your chances of getting credit in the future. FriendlyScore also suggest ways of improving your score to enable you to get even better deals in the future. Best of all, it’s free.

To check your FriendlyScore today, simply download the app from either the Google Play Store or Apple App Store.