Joint Mortgages |
Getting a joint mortgage with someone is a huge commitment, but with the price of property as it is, it is often the only way to get on the property ladder. It is a huge decision to make, and be prepared, it will be the first of many if you decide to get a joint mortgage.
The first thing you need to decide is why do you want to get a joint mortgage with this person? If it is only so that you can get on the property ladder or you feel under pressure to be buying together, then you really should not be taking this option. You should be getting a joint mortgage if you truly just want to live with this person.
If you decide a joint mortgage is a good choice, then you need to make sure that both of you are planning on staying in the same area for the next 5 years plus. If you are not definitely sure where you want to live, or think you might want to move somewhere else in the near future, then renting is probably a cheaper option.
An important area you need to decide on before getting a joint mortgage, is how you are going to pay bills. The mortgage payments are the obvious large monthly payment, but you will also have council tax, gas, water and electricity bills and insurance to pay. How are you going to split the payments? Are you going to have a joint account used to pay bills? Are you planning on having children? If someone stays at home to care for them, how do you split the bills then?
It may not seem very optimistic, but arranging a co-habitation agreement is definitely a good idea before you commit to a joint mortgage. If the unexpected should happen, how are you going to split the profit/loss associated with the property? A co-habitation agreement should cost around £250 each, but it could save a whole lot more than that in the future. If you do split up, and dont have a co-habitation agreement, you may end up paying £1000s in solicitors fees to sort out rights.
As with any mortgage you should try to save as much as possible beforehand, to give you a good amount to use for a deposit. If you can pay a good amount of the house price with a deposit, a lower percentage mortgage should give you lower interest rates, and lower fees.
It is tempting to take out a large mortgage so you can buy a bigger house, but it is not a good idea to get the largest possible mortgage. If your joint mortgage is your first mortgage, you may not appreciate just how much council tax, electricity, gas and water bills, insurance, TV licence, phone bills and general maintenance can add to your monthly costs. Also take into account any costs you might have in the future – babies cost a lot of money!
