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Mortgage application by one person but joint purchase

(21 Posts)
CookieWarbler Sun 16-Aug-15 14:13:27

My DP and I are looking to buy together and are just starting to look at mortgages.
We will be selling our individual houses and putting down and equal amount of deposit each on our joint purchase. Overall we both earn good salaries and there is no problem in either of us affording the mortgage we are proposing to get.

My DP however is self employed and his income situation is either feast or famine and he has large overdrafts in place and uses credit cards which are then paid off when he gets paid - how quickly this happens depends on how often he gets work and when payment comes through. He has full accounts which will show his overall income for any year but I am worried about the possible scrutiny of his overdrafts and credit cards for a mortgage application and the fact that he's self employed is just trickier from a mortgage POV.

I am full time employed with a good salary,only other debt is about 1,500 on a 0% credit card and can produce all my payslips back to year dot.

Given his fluctuating income we have agreed that we will only borrow as much money as one person is able to afford on their own so that if his work hits a bad patch the mortgage can be paid and we don't worry how we can afford the mortgage and other living costs.

So, to get to the point, I want the mortgage company to look at my income only when applying for the mortgage but we would both be liable. Is this possible? We just don't want to possibly derail a mortgage application with looking at his more complex income situation when I am able to borrow that amount on my own.

Any advice would be greatly appreciated!

Sallyhasleftthebuilding Sun 16-Aug-15 14:20:00

The mortgage company are only concerned that you can pay. Good deposit helps, that fact that you are borrowing half of what you can afford will be in your favour. Ie you could afford joint 200k but borrowing 100k. I see no issues weather that use 3x joint Salary or 1.5 joint salary or in our case 3xDH plus 1 x mine. Bottom line you have and still are in a good financial position.

Sallyhasleftthebuilding Sun 16-Aug-15 14:21:22

The other thing is, it's better to have two people to be accountable for the debt than one.

CookieWarbler Sun 16-Aug-15 14:30:51

Great, thanks. So if we both apply, they will look at his income but hopefully won't use the flucuatuing income and use of debt too much against us if overall as a couple we can afford it. I'm hoping this will be the case.

Sallyhasleftthebuilding Sun 16-Aug-15 14:33:00

Yes they may even discuss a better way of managing what is ultimately a business overdraft. Whic could work out cheaper and be more manageable.

Duckstar Sun 16-Aug-15 14:34:01

I'm self-employed. When we bought our first house my DH bought it and mortgage was solely in his name. Most Mortgage companies won't allow someone to be on title deeds, but not on mortgage. They also wont just consider one income for joint application. If you are both applicants both your salaries and outgoings are considered (well actually in worse case scenario they could disregard your DH's income if has less then 3 years of accounts, but consider all his outgoings! This is what happened to us and hence why DH bought house).

Mortgage companies main worry is can you pay the mortgage back? If your DH is on the deeds and gets into debt then they can be secured against the property, which will put mortgage company at risk. Self-employed people are always considered higher risk.

I recommend speaking to a mortgage broker. I've 5 years of accounts now so when we remortgaged I went on deeds and mortgage. I just had to give my SA320s for last 3 years. A good mortgage broker can advise you best way to do things.

wooldonor Sun 16-Aug-15 14:38:42

Things may have changed but I know that in the past what Duckstar said was true - you couldn't have joint owners with only one name on the mortgage.

I think you need to take full advice, please don't rely on people telling you that all they care about is whether you can pay the mortgage. I haven't moved for years but I know from friends that getting a mortgage now isn't nearly as straightforward as it used to be.

CookieWarbler Sun 16-Aug-15 15:00:59

Thanks all, I was pretty sure we would both have to be on the mortgage application if we're both on the title deeds for the house, but wondered if they could only use my income. I think we will take some advice before we speak to any lenders, he does have accounts going back many years but I know he will be seen as more risky. Now to find a good local mortgage broker!

eurochick Sun 16-Aug-15 15:06:05

We are joint owners but only my husband's salary was considered for the mortgage application. It was a slightly odd situation as I'm the higher earner but we were making the application while I was on mat leave and changing jobs. I had six weeks between old job and new (should have been on notice period but old firm cut my notice shirt and paid me off) so I am listed as "housewife" on the application, which was briefly true. So it can happen.

Duckstar Sun 16-Aug-15 15:12:06

Cookie where in the country are you?

CookieWarbler Sun 16-Aug-15 15:18:54

I'm in Kent Duck

Duckstar Sun 16-Aug-15 15:26:10

I'll PM you my broker's details. He covers the SE and is brilliant. Really knows his stuff. Totally non-judgmental. I think he's seen it all.

CookieWarbler Sun 16-Aug-15 15:32:07

Brilliant, thanks so much Duck smile

Duckstar Sun 16-Aug-15 15:39:44

Think have PM'd you Cookie (first PM). Let me know if you don't get the message.

Gobbolinothewitchscat Sun 16-Aug-15 15:42:51

If you have an HSBC premier account and mortgage wit them, they will let both names be on the title deeds and only person apply for the mortgage. They second person needs to agree to what is called an "indirect charge" though. We've just done this

Gobbolinothewitchscat Sun 16-Aug-15 15:43:40

Sorry - only one person apply for and be the mortgagee.

CookieWarbler Sun 16-Aug-15 16:22:06

Thanks Gobbolino (love your name, I loved those stories too!)
Funnily enough DP does have an HSBC premier account and a mortgage with them so may look into that too - good to know

TalkinPeace Sun 16-Aug-15 21:04:58

There should be no problem at all buying a house based on just one income - its really quite common .....
DH and I did it
as did most of our generation's parents smile

Trickytricky Sun 16-Aug-15 21:09:40

I moved jobs around the time we were applying for our mortgage so was still on probation. As I was still on probation the mortgage company were a bit of a pain about it and said they would only approve the mortgage once I'd had my first payslip. So we decided to apply only based on my DH's income but applied in both of our names. So the calculation was only done on my DH's income but we're both liable for the debt and both own the property.

Hope that helps. As long as you can afford the mortgage on your own it won't be a problem applying just based on your income.

oldbrownboot Sun 16-Aug-15 21:45:12

Your situation sounds very similar to mine. My DP is self employed but doesn't earn much and has never done official books with accountant or anything. We mortgaged 2 years ago using a broker (L&C) - that was joint purchase, joint mortgage, but it was based on my income and they only asked for information and evidence about my finances (didn't even ask for DP's bank statements). More recently (remortgage - again joint, this time with first direct) we had to supply information and evidence of both our financial situation but mortgage amount was based on what I could afford on my salary. They were really helpful and seemed to see the situation as v normal.

Gobbolinothewitchscat Mon 17-Aug-15 08:09:06

You're welcome cookie smile

Essentially, if you agree to the indirect charge, the person who is not in the mortgage is not obliged to pay the mortgage but has to agree to their half share in the property being recovered if the mortgagee defaults

I'm a SAHM so it was just easier for the mortgage to be approved on DH's income only - particularly as I have a flat that I rent out. It's always been tenanted but our accountant said that a lot of lenders get a bit nervous about that

DH is self-employed but had three years of accounts and as hsbc are his bank, it was all relatively painless. I'm a lawyer (albeit not a property lawyer) and I was also v impressed with the solicitors the bank instructed to do the conveyancing. They were very efficient and responsive so I'd recommend HSBC just for that

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