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Bestinvest: Be 'totally clear' about joint mortgages

People opting for joint mortgages should be "totally clear" about the commitment involved in becoming a co-buyer, according to Bestinvest.

The independent financial adviser has warned against entering into a joint mortgage with friends or without knowing the other buyer.

While sharing a mortgage may make sense financially, Peter O' Donovan, Bestinvest's mortgage manager, said that co-buying with a friend can present problems if they are seeking to buy a house rather than renting because circumstances may change, as might the relationship.

Buying a house with someone without knowing their credit rating is "extremely risky" owing to a lack of protection provisions in joint mortgages, according to Mr O' Donovan.

"If you buy a house with someone and you don't know their credit record, that's even worse because you are jointly and solely liable for that mortgage. If the other person stops paying you have to continue," he said.

Joint mortgages have become increasingly popular for graduates wanting to get onto the property ladder, according to Scottish Widows, while 69 per cent of these would be unable to buy their co-buyer out.

See how much you could borrow with a home loan from Lombard Direct.

© Adfero Ltd

19/12/2007 15:52:57

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