First Time Buyer Joint Mortgage

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FTB Joint Mortgage

Paul Collinson explains how a joint mortgage works if you are a First Time Buyer.

How do joint mortgages work for First Time Buyers?

The same as for second or third time buyers, really. Lenders will use both of your incomes and commitments to gain the maximum borrowing amount achievable for you. You’re then both jointly reliable for the mortgage payments.

My partner is a First Time Buyer, but I’m not. What are my options?

If you’re both on the same mortgage and the title deeds, from a stamp duty perspective it won’t be classed as a First Time Buyer purchase – you both have to be a First Time Buyer.

There are certain things that you can do – if your parents are going on the mortgage, for example, you can have a Joint Borrower Sole Proprietor scheme, which we have done an episode on. Only one of you would be on the property deeds, and the other person helps with mortgage affordability. This way, HMRC would class it as a First Time Buyer property.

There are many options, so we would need to have a chat about it. Everyone’s different, so we would talk to you about what’s out there for you.

Do both buyers have to be First Time Buyers? Do couples lose First Time Buyer status if one partner bought in the past?

Yes, they do lose First Time Buyer status if they’ve previously been on the title deeds of a property.

Do I have to pay stamp duty if my partner is a First Time Buyer but I’m not?

Yes. There are certain thresholds which you can check on the HMRC website where, depending on the value of the property, there’s no stamp duty payable. I can’t really give tax advice, but look at the HMRC website as that will show the different levels that you need to pay at.

What does being joint tenants or tenants in common mean?

Joint tenants is the standard way of buying a property, which is where you both own the entire property equally. If one of the owners dies, the surviving owner receives their share.

With tenants in common, each owner has a defined share and upon death their share wouldn’t necessarily go to the other owner. It would be distributed in line with their Will.

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Can I get a mortgage with a guarantor? What is a Joint Borrower Sole Proprietor mortgage?

Yes, you can get a mortgage with a guarantor. We did an episode a couple of months back about guarantor mortgages, so you can take a look at that. Nowadays, it is more common to purchase on a Joint Borrower Sole Proprietor mortgage.

As I explained, it’s a mortgage where one applicant is on the deeds and both are jointly named on the mortgage. I do have lenders that can accept up to four applicants and use four incomes. You could have four on the mortgage and only one of the people on the deeds – or two on the deeds, whichever way you would want.

How much can you borrow as a First Time Buyer with a joint mortgage? How much deposit do I need?

We need to look at the whole picture for you to find out the maximum borrowing. We need to look at both incomes and your commitments, along with any dependents you have.

You would need a minimum of a 5% deposit, unless you’re fortunate enough to be using your Right to Buy on a council property with a lovely discount – in which case you can use that for the deposit.

One lender out there is doing 100% mortgages, but they have very strict criteria. Not many people can get it because it’s down to the rent you’ve been paying in the last year – but we can have a chat about that option.

That’s just one lender out of nearly 100 that I deal with. I don’t know how long it’s going to be around for, but it’s available as we speak now in February 2025.

Can you transfer a joint mortgage to one person?

You can. I would suggest you get some tax advice on that, because there may be stamp duty implications. You can do it, but do look at the tax side of things first.

How do you calculate a First Time Buyer joint mortgage?

We work with 100 lenders and we’ve got systems that will do this all at once to assess the maximum achievable for you. We would just need your age, income and commitments to calculate that.

Most lenders will go between 4.5 to 4.9 times your income. Then your commitments come off that. I do have lenders for First Time Buyers that could lend up to five and a half times your income. One new deal came in last week where if you fit certain criteria with them, you could reach six times income. Again, that’s correct as of February 2025.

How can a mortgage broker help me get a joint mortgage as a First Time Buyer?

When you come to us, we will work out your maximum borrowing amount. You will then know what property values to look at and what deposit you need to save up. When you find somewhere, we get the most suitable option for you and guide you the whole way through until the day you move in.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.