First Time Buyer Joint Mortgage
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First Time Buyer Joint Mortgage
Sam Bull explains how First Time Buyer joint mortgages work and what to be aware of.
What is a joint mortgage and how do these work for First Time Buyers?
This would be where you apply for a mortgage in joint names with somebody else. Usually you would be buying with a partner or a family member.
With a joint mortgage, both applicants’ income, expenditure and credit history will all be assessed for the mortgage application.
My partner is a First Time Buyer, but I’m not – what are my options?
You can both still apply for a joint mortgage, but with the majority of mortgage lenders you’re going to qualify for their home mover products rather than First Time Buyer products. That tends to be the case if one of the buyers has already owned a home previously.
Do both buyers have to be First Time Buyers? Do couples lose First Time Buyer status if one partner has bought in the past?
Both buyers do not have to be First Time Buyers to apply for a joint mortgage. But most mortgage lenders will not allow applicants to apply for First Time Buyer products if one applicant has bought a property in the past.
There are some exceptions to that, however. With one or two mortgage lenders on the market, a First Time Buyer is defined as an applicant who hasn’t held a mortgage in the last three years. If that would apply to you, you may be able to access that mortgage lender’s First Time Buyer products. But that’s not going to apply to everyone.
Do I have to pay stamp duty if my partner is a First Time Buyer but I’m not?
You would not qualify for any First Time Buyer stamp duty rates if one of the applicants has previously been a homeowner in the UK.
There’s a stamp duty calculator on the government website which I would recommend people take a look at. This will accurately calculate how much stamp duty you’re going to pay on your purchase.
What does being joint tenants or tenants in common mean?
Where applicants buy a property jointly, there are two ways of owning it: as joint tenants or tenants in common. Joint tenants is usually recommended when co-owners are married. If one applicant dies, the survivor will automatically inherit the whole of the property.
Tenants in common is usually recommended when the co-owners are not married. It means you can both own a defined percentage of the property. For example, you could make it so that one person owns a 70% share and then the second applicant has a 30% share – you can have that percentage defined upfront.
Can I get a mortgage with a guarantor?
Yes, you can apply for a mortgage with a guarantor. It’s very similar to applying for a joint mortgage, but the guarantor will not be named as an owner on the title deeds of the property. That’s the main difference.
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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.
How much can you borrow as a First Time Buyer with a joint mortgage? How much deposit do I need?
Most mortgage lenders will lend around four and a half times your combined income, and some will lend up to 5.5 times. So it’s just going to depend on the mortgage lender and your individual circumstances.
We would complete a brief fact find with you and take down information on your income and expenditure. We would then be able to advise exactly how your maximum mortgage would be.
You will need a minimum 5% deposit, but some lenders may require a higher level deposit such as 10% or 15% if you’ve had any past issues with your credit history.
It also depends on the type of property you’re looking to buy. For example, it’s quite common for mortgage lenders to want a minimum of 15% deposit if you’re buying a new build apartment.
What is a Joint Borrower Sole Proprietor or JBSP mortgage?
This would be where you apply for a mortgage in joint names. The mortgage would usually be joint with a parent, using their income for affordability purposes. But only the main applicant would be named as the homeowner on the property deeds.
Can you transfer a joint mortgage to one person?
Either applicant would be able to apply for the mortgage to be placed in their own sole name. However, there’s no guarantee that the mortgage lender will accept that – because they will need to do a new credit check and affordability check.
They need to make sure that the sole applicant taking over the mortgage is both creditworthy and has the income to support the mortgage in their sole name.
How can a mortgage broker help me get a joint mortgage as a First Time Buyer?
A mortgage broker like JB Mortgages can help First Time Buyers arrange a joint mortgage. Because we have access to over 100 mortgage lenders, we’ll ensure that the First Time Buyers have access to the cheapest products that they qualify for. We also help with all the initial assessments.
We can issue the Agreement in Principle, complete all the necessary mortgage applications and help with all the solicitor paperwork, too. We really look after First Time Buyers and hold their hand through the whole process.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.