Group Mortgages have recently allowed many more people to access the property ladder. People who have found it hard on a single income can now join forces with another person and create better buying power.
Group mortgages have also been known to be referred as friends and family mortgages
Why consider a group mortgage?
The property market has steadily seen a rise over the years; in fact many have seen a considerable growth and build up of equity in their property. With this in mind the property market has become difficult for many individuals to enter due to the sheer costs involved. Even with an average income many people cannot afford to buy their first home, especially in certain areas of the UK. First time buyers are generally couples who have two incomes which allow them to be considered for greater loan amounts when making a mortgage application.
The main driver of group mortgages is buying power, in simplest terms a combined salary of 2 or 3 people would create more buying power than just 1.
In you join forces with a family member or a friend you can now make a joint mortgage application and be considered for a mortgage for your first home. Some family members get involved to help their sibling onto the property market and also a financial investment for themselves.
Another reason why you may wish to consider a group mortgage is if you have been paying rent for a number of years; you may have realised that you are not really getting anything in return and your monthly outlay is not giving you the opportunity to create a level of investment.
Who owns the property?
With a group mortgage all parties involved in the purchasing of the property would be seen as the legal owners once the mortgage loan has been fully paid off. Equally, up until that time the liability is shared across all involved. It is important that you understand the legal implication of this, a solicitor could generally be utilised to help draft and prepare any necessary paperwork for all internal parties.
Can I rent the property?
Yes, however it is best to check with the exact group mortgage lender at time of application as some mortgage lenders may have different clauses and terms.
How do I get a group mortgage?
Once you have found the right person or people for a group mortgage you need to investigate the market and find the mortgage lender that can offer you what you need. Visit the high street or simply complete our straightforward enquiry form below and we will do all the work for you and find the most suitable provider on your behalf.