What if I am buying with someone else?
There are a few things to consider if you are buying with a partner you are not married to or civil partnered with, such as a friend, family member or partner:
· First time buyer incentives such as Help to Buy: Equity Loan and the Stamp Duty reduction require that all purchasers are first time buyers. Furthermore, if one purchaser already owns a home, (even just a share in one) the whole purchase will attract an additional 3% Stamp Duty.
· Consider how you want to own the home; as Joint Tenants or Tenants in Common. If you are Joint Tenants, common for romantic partners, if one of you dies, the other automatically becomes the owner of the whole property. Being Tenants in Common, ideal for friends or siblings, allows you to specify who owns what percentage of the house, and for that percentage to be left to someone in a will.
· Tenants in Common should ask their solicitor to write a Deed (or Declaration) of Trust, confirming the percentage each tenant owns, what happens if someone dies or wants to sell, and arrangements if someone wants to bring in a partner.
· Many lenders allow up to four people to have a joint mortgage, but all borrowers must fit the lending criteria, so if one has a poor credit history, or is not a first time buyer, it will affect everyone. All borrowers are jointly liable for the mortgage– so if one can’t pay, the others have to make up the full amount.
· When you apply for a joint mortgage with anyone, they become a “financial associate” and their credit report becomes linked with yours. If they have a poor credit history it could affect your own ability to take out loans, so check beforehand.