Getting a mortgage with a friend
Mates Mortgage, Friends Mortgage, Group Mortgage, call them what you will, getting a mortgage with a friend or friends is set to become more and more popular, particularly in areas with high house prices.
First-time buyers are increasingly having to turn to their friends in order to get on the first step of the property ladder, particularly in London and other areas with low levels of affordable housing.
How many people can go in on a group mortgage of this type?
Buying a property with up to three friends is considered relatively normal and for some people it may be the only option.
Who can I get a group mortgage with?
It is usual to get a group mortgage with friends or family members. However, you should be sure that living in close proximity with the people you choose to move in with is not going to cause conflict or arguments. Unlike a shorthold tenancy agreement, a mortgage generally has an expiry period of much longer than six months or a year.
Why not just wait for my salary to rise?
First-time buyers remain determined to get on the property ladder, despite problems with affordability. Reasons for this could include the desire to stop spending money on rent, buying property as an investment for the future, and the desire to get on the property ladder before house prices rise even further.
But surely a house will be affordable at some stage?
This is not a certainty. Although many first time buyers make it onto the first-step of the property ladder, the average house price in England and Wales now exceeds £200,000. This is over six times the average salary… just one of the reasons why applications for group mortgages are increasing rapidly.
What should I look for in a co-owner?
It is worthwhile bearing in mind that you could live with the people you buy property with for many years. You should know them well and trust them as much as possible.
What happens if my co-owners suddenly become unemployed and cannot meet mortgage repayments?
These, and numerous other potential problems, are some of the pitfalls of group home ownership. However, if a legal agreement is drawn up before the purchase of the house is completed and the mortgage is approved, then problems can be averted. A legal agreement of this type should detail all potential problems such as one person wanting to move out, etc.
How should I go about getting a group mortgage?
Please use our Mortgage Enquiry Form and one of our experts will contact you for further assistance. Alternatively, you can give us a call on 0800 242 5387.
