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How much can a couple borrow for a mortgage?

Author: Myles Robinson - Expert Finance Advisor

Posted: Jul 12, 2022

How much can a couple borrow for a mortgage in the UK right now?

As a mortgage broker, many people contact us asking for information on joint income mortgages. You may be a first-time buyer who is looking for a joint income mortgage.

We can introduce you to mortgage lenders who offer joint mortgages. Let us help you get your mortgage, click to get your quote below:

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What is the process of joint income mortgages?

Joint income mortgages are very common. They allow you to purchase a property with another person. Due to the fact that two incomes are usually higher than one, borrowing can be higher.

Joint income mortgages do not only apply to married couples. There are many options and possible combinations. After you have read the information, it is important to make contact with us so that we can get in touch with a specialist mortgage lender who works with you.

A Joint Mortgage refers to all mortgagees, who are jointly responsible for making sure that the mortgage payments are made in accordance with their obligations.

You have the option to decide how ownership and equity are divided. For example, a tenant in the common mortgage. However, both parties will be liable for the entire mortgage and monthly repayments.

A majority of mortgage lenders will approve a joint income mortgage for two people. However, some mortgage lenders will accept applications from up to four people. Most lenders won’t consider more than two incomes but will accept two. Some will take three, while others will take four.

A mortgage broker such as Loan Corp can offer free mortgage advice, explain how much you can borrow, how the income multiples work and find you a mortgage provider.

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Who can get a joint income mortgage?

A joint income mortgage could be as low as:

  • Spouses
  • Civil partners
  • Friends
  • Family members
  • Partner companies
  • Joint mortgages between parent and child
  • Anyone with a valid reason to do so is eligible
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For couples, joint income mortgages

Most joint residential mortgages are taken out by spouses or civil partners, who plan to live together.

It is a good idea to take into account your income if you are married. This will increase your chances of getting a loan under their affordability criteria.

For friends, joint income mortgages

Many lenders will approve mortgage applications from friends who are looking to buy a property for their own use or to rent it out.

Before submitting an application, it is wise to review the credit history of each applicant. This will impact the whole application if one applicant has poor credit ratings.

Be aware that your lender will require all payments to be made in full. If one applicant is unable or unwilling to pay their share, the other applicant(s), will be responsible for the difference.

This is the problem with buying with friends because if you get in a fight there could be financial consequences.

Joint income mortgages for families

Joint mortgage applications will be accepted by most lenders with sole occupancy. This is where one applicant intends to live on the property. If a parent wants to help their child climb the property ladder, they can make a joint mortgage application.

It is best if the parent has a steady income and a good credit history.

These circumstances offer other options, such as guarantor loans and where parents can use their property to secure their child’s mortgage.

Talk to our mortgage broker and specialist advisors for the best advice in this field.

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Joint income mortgages available for business partners

This application is for business partners who are interested in purchasing a property to rent.

Before submitting an application, it is up to the partners to agree on the ownership and equity allocation. This is a common scenario and most lenders are happy to consider joint mortgage applications.

What is the allocation of equity and ownership in a joint income mortgage?

When you purchase a property in joint names, there are two types of ownership: joint tenancy or tenancy-in-common.

Joint tenancy is when each owner has an equal right to the property and any profits from a sale are shared equally. The property is passed to the surviving owner if one of them dies. Joint tenancy is common for civil and spouse partners.

When taking out a joint income mortgage, friends, family and business partners will normally share tenancy. A trust deed, which is a legal document that a solicitor creates, allows applicants to legally separate their shares of the property.

If you are looking for a joint-income mortgage, you should speak to one of our advisors. They are experts and will help you achieve a positive outcome.

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What is the maximum amount we can borrow to get a joint mortgage?

Traditional lenders used a simple joint income calculator to determine how much a couple could borrow for a mortgage. This was based on their combined income.

A lender might offer a mortgage to a married couple who have a combined income of £60,000. The lender would lend to these applicants up to £240,000.

The mortgage affordability calculator can give you an estimate of how much you might be able to borrow based on your income.

Is income multiples the only way to determine how much you can borrow?

No, they’re not. Although the use of income multipliers to determine how much someone can borrow to figure out how much is possible is very easy to understand, it does not give lenders a complete picture of someone’s financial situation.

What if the couple shown above has monthly outgoings that leave them with very little to no income? What happens if the interest rates rise quickly a few years after they have taken out their mortgage and raised the monthly payments? What happens if the children of the couple need money to attend university?

These ‘what-if’ scenarios and the volatility in the market have led to many changes since the Mortgage Market Review (MMR), in 2014. Lenders now take a more responsible approach to lending, using detailed affordability analysis before deciding how much a borrower can borrow.

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Are joint mortgages good for couples?

Potential borrowers have a better opportunity to see how much they can borrow based on their future and current outgoings before they submit an application.

Lenders still consider income multiples when deciding how much a borrower can borrow. Most lenders will lend to joint applicants an income multiplier of 4x, 6x, or none at all.

Lenders who do not offer a maximum income multiple will most likely base their decision on applicants’ ability to meet the affordability criteria.

You can find more information about this topic in our article.

What is the maximum amount we can borrow to get a joint mortgage?

Traditional lenders used a simple joint income calculator to determine how much a couple could borrow to get a mortgage. This was based on their combined income.

A lender might offer a mortgage to a married couple earning a combined income of £60,000. The lender would lend to these applicants up to £240,000.

It is very easy to grasp the concept of income multipliers to determine how much a borrower can borrow. It is so simple and easy to understand.

What if the couple shown above has monthly outgoings that leave them with very little to no income? What happens if the interest rates start to rise quickly a few years after they have taken out their mortgage? Does this mean that monthly payments will go up? What happens if the children of the couple need money to attend university?

These ‘what-if’ scenarios and the volatility in the market have led to many changes since the Mortgage Market Review (MMR), in 2014. Lenders now take a more responsible approach to lending, using detailed affordability analysis before deciding how much a borrower can borrow.

Potential borrowers have a better opportunity to see how much they can borrow based on their future and current outgoings before they submit an application.

Lenders still consider income multiples when determining how much a borrower can borrow. Most lenders will lend to joint applicants an income multiplier of 4x, 6x, or none at all.

Lenders who do not offer a maximum income multiple will most likely base their decision on applicants’ ability to meet the affordability criteria.

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What affordability criteria are used by lenders to approve joint income mortgages?

Every lender will review each application individually and conduct an affordability assessment. Here’s a general overview of the areas that a lender will examine:

Income

Lenders will consider 100% of an applicant who is employed. Lenders will also consider overtime, bonus schemes and regular commissions.

But, lenders won’t necessarily accept all of the earned income, unlike base salaries. While most lenders will accept 50%, some will accept 100%.

Self-employed applicants will usually need to provide evidence of trading activity over a time period. Lenders will typically consider self-employed income to be net profit from the business.

Lenders will require a track record for at least three years. Some will prefer 2 years. A few lenders will only accept a 12-month track. And a few may even allow less than 12 months if the circumstances are right.

Lenders may also consider joint applications where one applicant’s income comes from other sources, such as rental income or government benefits. This scenario typically requires one applicant to have a solid track record of self-employment or employment.

Outgoings

A lender will also want to know your income and current living expenses. These expenses include your credit card and loan payments as well as utility bills.

A lender might request your bank statements to verify these expenses.

This may all seem like a lender is looking into your finances. However, they are actually doing it to make sure you can afford the monthly mortgage payment.

Future changes to your income and spending

To ensure that your financial stability is maintained, a lender may also stress-test your finances.

Lenders will need to be sure you can meet your mortgage obligations if interest rates rise, if one applicant is unable to work or if children are involved.

These rigorous affordability assessments are done to ensure that both you and the lender have confidence that you won’t fall behind on your mortgage payments.

Each lender uses its own criteria to assess affordability.

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Is it possible to apply for a joint mortgage with only one income?

Yes. Many households rely on one income for their livelihood, either permanently or temporarily.

Many couples, married or not, will need one partner to stay at home with their children.

Lenders will accept joint mortgage applications that include one salary in these cases. As discussed above, affordability will only be applied to one set of incomes and not two. All applicants will be subject to credit history checks. This may prove beneficial if they are both clean.

A lender may be considering future income and expenditure changes if a partner is not working but intends to find work opportunities later (for example, when the children turn a certain age).

This would be a good example of how to add credibility to a request rather than derail it.

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If we are retired, can we still apply for a joint mortgage?

Yes, that’s the short answer. A mortgage can be obtained based on your retirement income. It is possible to get a mortgage based on retirement income if you are retired or nearing retirement.

Lenders will generally limit the maximum age they will lend to at the end of a mortgage term to 75. Some will loan up until 85 and some have no maximum age.

Another factor to consider is your income level. Typically, pension income tends to be lower than other types of earned income. This may limit the number of lenders willing and able to accept joint applications from retirees.

It can be difficult to apply for a joint income mortgage as you approach retirement.

What deposit is required for a joint mortgage?

There are no distinctions between single or joint mortgage applications and the lender’s deposit requirements. You will need to deposit money in order to purchase the property. A general rule of thumb is that the larger the deposit you offer, the more lenders will consider your application.

A mortgage application that has a low deposit is considered riskier. This means fewer lenders will consider it and may charge higher interest rates to offset this risk.

Deposits of 20% are accepted by most lenders, while 10% will be accepted by some lenders. A few lenders will only accept deposits as low as 5%.

It can be difficult to understand the deposit requirements for all mortgage markets.

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If one or both of our credit histories are poor, can we still get a mortgage?

Bad credit ratings can cause problems when applying for a mortgage. This is true regardless of whether the application is on a sole or joint basis. It all depends on what type of issue you have had and when it was filed.

If you are applying for a joint mortgage with a bad credit applicant there are lenders that will consider applications from borrowers who have had credit problems in the past. There are also some bad credit mortgage lender specialists who can help with these types of applications.

Some specialist lenders may consider:

  • Late payments and joint mortgage applications
  • Joint mortgage applications with defaults
  • Joint mortgage applications with CCJs
  • Joint mortgage applications and mortgage arrears
  • Joint mortgage applications and Debt management plans
  • Joint mortgage applications with IVAs
  • Bankruptcy joint mortgage applications
  • Repossession and joint mortgage applications

Talk to a specialist in joint income mortgages

You can contact us today if you have any questions or would like to make an enquiry.

Relax and let us find the right broker for you. We do not charge any fees and you are under no obligation to go ahead.

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