4 Person Mortgage
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4 Person Mortgage
Sam Bull is here to explain how a four-person mortgage works.
Can I get a mortgage with four people? Can a house be owned by four people?
Yes, you can have four people on a mortgage application. It would be just a normal joint mortgage application between all four applicants. Not all mortgage lenders will allow four people on a mortgage application – some only allow two.
We would, of course, make the enquiries upfront and make the appropriate mortgage recommendation for our clients.
How many people can legally own a house?
In the UK, up to four people can legally co-own a house.
Can you get a mortgage with friends?
Yes, you can get a mortgage application with a friend. You don’t have to be related to someone to buy a house and get a joint mortgage application with them. Friends are absolutely fine.
How do mortgages with four or more applicants work?
A mortgage with four applicants works the same as any traditional joint mortgage. We would require a full set of documents from all four applicants, and we would submit the application as normal.
It’s worth noting that some mortgage lenders are happy to use all four sets of income for affordability, to get the maximum borrowing available. Some other lenders will only use the first two applicants’ income for affordability.
So again, we’ll just check your requirements. It’s also good to note that even though there are four applicants, only one direct debit will be set up for the mortgage payment, coming out of one bank account.
What deposit do you need and how much can you borrow with four people on a mortgage?
You can proceed with a minimum of a 5% deposit on a mortgage with four applicants. This is the same as any normal mortgage application.
In terms of how much you can borrow, the same income multiple applies – so around 4.5 times your combined salaries. Some mortgage lenders will allow you to use all four salaries in that 4.5 times income multiple.
What documents do you need with four people on the same mortgage?
There’s no difference in the documents you’d need for the mortgage application. The documents required would include proof of ID and proof of address.
For a purchase, we’d also need proof of deposit. For a re-mortgage, we’d need a copy of the mortgage statement. Then, we’d need three months’ pay slips and bank statements. For self-employed applicants, we’d need three years’ accounts.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
Does it cost to add someone to a mortgage?
The mortgage lender may have a small administration fee for adding someone onto the mortgage. There will also be some solicitors’ costs involved.
They will, of course, complete the necessary paperwork to the Land Registry. You will pay a couple of hundred pounds to the solicitor for that.
Do you pay stamp duty when adding someone to a mortgage? What other costs are involved, if any?
Stamp duty may apply when adding someone onto a mortgage, if an amount is being paid for the equity. If there’s no payment for the equity, there’d be no stamp duty.
We would give you an exact quote on this prior to any mortgage application being made.
What are the pros and cons of having four people on a mortgage?
There are two main pros to having four people on a mortgage application. The first is that you may be able to borrow more, with four sets of income included in that 4.5 times income multiple. Also, having four people contribute towards the deposit may also be helpful.
The main disadvantage of having four people on the mortgage is that not all mortgage lenders allow it. So we may have to discount certain lenders who only allow two people on an application.
Which lenders offer mortgages to groups of four or more people? Are there many?
Many mortgage lenders offer mortgages to groups of three or more people. As of today, lenders like Halifax, Barclays, TSB and Metro Bank allow this, just to name a few [podcast recorded in September 2024].
How do you get a multi-applicant mortgage? How can a mortgage broker help?
If you’re looking to proceed with a multi-applicant mortgage, I’d recommend speaking with a mortgage broker. We will gather all your information up front and recommend the most suitable mortgage lender for your circumstances.
A good broker will check through all your paperwork, arrange your Agreement in Principle, and complete your full mortgage application. We’ll see you all the way until the mortgage is completed.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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