Joint Mortgage: What To Know About Applying For A Home Loan Jointly.
What Is A Joint Mortgage Loan?
A joint mortgage is shared by multiple parties, typically a home buyer and their friend, partner or family member. Some people apply for a parent-child joint mortgages with their adult children. A joint mortgage allows two or more parties to pool their financial resources and potentially qualify for a bigger or better loan than they could have on their own.
Unlike joint ownership, which sees two parties sharing the legal ownership of a property equally, a joint mortgage has nothing to do with whose name is on the deed. With a joint mortgage, two parties are simply both responsible for the loan – even though one of them may not have their name on the actual title and doesn’t technically own the property.
How Joint Mortgage Loans Work
When you buy a house with a joint mortgage, you share responsibility for the loan with another person. While joint mortgage applicants are often married, you don’t have to be married to the other party on your loan – you just both have to qualify and be over the age of 18. The factors used to decide whether you qualify for the loan are pretty much the same as if you were applying for a mortgage yourself; your lender will look at borrower credit scores, income, debt, employment history, etc. All parties that will be on the loan have to submit their own mortgage application.
If you’re approved, both you and the other party involved will sign a promissory note. You will both be equally responsible for making payments on the loan, though one of you can make the payments on behalf of the pair or group.
Whose Credit Score Is Used On A Joint Mortgage?
When you get a joint mortgage, your lender will look at the credit history and credit scores of all applicants that will be on the loan. Since everyone’s credit will impact the loan you qualify for, it can be detrimental if you or the person you’re applying with has a poor credit score.
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