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Multiple Applicant Mortgages

Can you get a mortgage with more than one person, and does it matter if you're not related? We explain everything you should know before applying for a mortgage with multiple applicants.

Can More Than Person Get One Mortgage?

The Revolution Brokers team regularly deals with enquiries about mortgages between multiple parties. With lenders allowing up to four people to apply for a joint mortgage, this is always something you can consider!

Here we summarise how multiple applicant mortgages work and what sort of decisions you will need to make before starting your application.

For help with your joint mortgage, or to run through which products are most suitable, give us a call on 0330 304 3040, or drop a message to [email protected].

Can I Get a Mortgage Between Multiple People?

You can indeed - that can include two or more applicants. Not all lenders offer this sort of mortgage, but we can recommend providers who provide mortgages for up to four people.

You can name up to four people on the deeds in some cases, but the income assessments will only consider the two highest-earning applicants.

There are lots of reasons you might consider a multi-person mortgage:

  • You can club together to offer a higher deposit.
  • Combined income makes the mortgage payments easier to afford.
  • More people means you can borrow a higher value.

What are the Multiple Person Mortgage Options?

You'll find several mortgages, all designed for multiple applicants.

  • Joint borrower, sole proprietor mortgages mean that family members or friends come onto the mortgage application to help with the affordability. However, they don't live in the property and are not named on the deeds.
  • Family mortgages are popular where somebody can't finance a deposit. The lender can take security over a family member's asset or savings and use that to guarantee the mortgage loan.
  • Family offset mortgages usually mean putting down a 5% deposit as a gift from a close family member and transferring savings of around 15% to 20% of the purchase value into a savings account with the same lender. That cash isn't taken but cannot be spent and acts as a security deposit to help you get the mortgage lending you need.
  • Guarantor mortgages are another family support option. In this situation, the family member guarantees your debt and will be responsible for it if you fall behind with the repayments. They usually need at least 25% equity in their own property and to have a clean credit record.
  • Tenants in common joint mortgage agreements are standard when friends buy a home together. This option means that each person owns their own stake in the property and can sell it as they wish.

Who Can I Get a Joint Mortgage With?

There are no restrictions on who you can choose to buy a property with. Some lenders have limits on the maximum number of applicants, so give the Revolution Brokers team a call if this is over two people to ensure you apply to the right lender.

In some cases, lenders will happily offer a mortgage to four people, provided they all live there as their primary residence.

Others lend to group applicants only if they are related or if the deposit value is at least 20% to mitigate the risk factor.

How Does the Affordability Assessment Work on a Mortgage for Multiple Applicants?

It depends on the lender. Some will include the earnings of only the two highest income earners, even if there are three or four people on the application.

Applying for a group mortgage can be challenging to calculate since every lender will use a different assessment policy and vary what they are prepared to offer.

For example, if you have three people on an application, one lender might cap the offer at three times the three applicants' salary.

Another might lend up to five times the joint income of the two highest earners. Still another lender may offer four times the income of all three applicants - hence why it is vital to seek advice from a broker to ensure you can get the mortgage you need!

How Can I Split a Property Between Multiple Owners?

If you're buying as joint tenants, each party is equally entitled to a share in the property. If you sell it, the proceeds are divided equally, and if one owner dies, their shares automatically pass to the surviving owners.

Should one tenant wish to leave, the other owners often buy out their share through a remortgage.

Tenants in common are different, and you can split the ownership in any proportions you wish, with a Deed of Trust to set out legal obligations and entitlements arising from the joint ownership.

How Does a Deposit Work for a Multiple Person Mortgage Application?

Most lenders will dictate that the named applicants must provide the deposit. Usually, a gifted deposit from an immediate family member is acceptable.

You can also source deposit contributions from savings or from a support scheme like Help to Buy.

Generally, you can use a deposit gifted from a parent. Lenders have varying rules about whether they will accept deposits sourced from wider family members.

Can I Get a Multi-Person Mortgage with a Friend with Bad Credit?

Possibly - but even if most of the applicants have a good credit history, a lender will need to consider their offer if one buyer has a bad credit report.

Every applicant will be credit checked, and a lot depends on how serious the credit issues were, how recently they occurred, and whether the debt has since been repaid.

If the credit issues are severe, it might be wise to apply as a sole applicant rather than jointly or approach a professional broker to refer to a specialist bad credit lender.

Can I Get a Group Mortgage If I Am Self-Employed?

Yes, you can! The only real difference with a self-employed applicant is how the lender assesses your income to determine if you can afford the mortgage costs.

The process usually works by considering the following factors:

  • How much profit you make, with most lenders needing three years of tax returns or trading accounts.
  • The type of company - so if you are a sole trader, they will look at your net profit, but if you are a limited company director, they will look at your salary and dividend earnings.
  • Average income is usually calculated based on the last two or three years.
  • Contractor mortgages look at your day rate and extrapolate that to arrive at an annual average.

Can I Get a Multi-Person Buy to Let Mortgage?

It is possible but depends on applying to the right lender. Residential properties can be bought on a joint mortgage by up to four people and buy to let lenders put similar caps of three or sometimes four applicants.

It would be best to consider the tax implications of investing in a rental property on a joint mortgage.

From April 2021, there are no longer tax reliefs available, and you cannot deduct mortgage interest from the rental income to potentially reduce the tax band you fall into.

Are There Joint Mortgages for Commercial Buy to Lets?

Indeed there are. Sometimes, the easiest solution is to set up a limited company with each applicant a shareholder. The company can then take out a buy to let mortgage and lease the commercial premises to the tenant.

In this situation, the tax burden is often less since you will pay corporation tax on the profits at 19%.

Independent Advice About Multiple Applicant Mortgages

As we've seen, there are many different types of mortgage and loans designed to make it possible for multiple applicants to purchase a property together.

For professional guidance about the best mortgage option for you, give our mortgage advisors team a call on 0330 304 3040, or email us at [email protected].

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