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My girlfriend and I are looking to buy a house together. Can one person take out a mortgage on a jointly-owned property?

If you are taking out a joint mortgage, the lender will insist that you should buy the property jointly. If only one of you is taking out the mortgage, the lender will insist the property is bought in their name only.

Although it is possible to take out a mortgage in one person’s name, there may be some things that you may wish to consider before you proceed. For instance, if there is only one name listed on a property, then they are generally considered as the sole owner of the property.

If you decide to purchase in one name only, the lender will require the other person as the occupier to sign a disclaimer. This is a very powerful form as once signed and completion has taken place it confirms that should you as the owner default on any terms of their mortgage offer and the Lender repose the property, not only can they require that you as the borrower move out but also that your partner does too. This will be the case even if they:

  • Pay the mortgage instalments
  • Pay rent
  • Carry out any works to the property
  • Pay for any works or pay towards the purchase of the property
  • Carry out any household duties or child care arrangements

In other words, no matter what rights they claim that they have to reside in the property (as distinct to any claim they may have in the net proceeds of sale) these will be postponed in favour of the Lender.

However, if you and your partner will equally be contributing to the mortgage payments, some difficulties may arise in terms of ownership of the property. For example, it may be difficult for your girlfriend to establish that she is entitled to a share of the property as her name will not be on the deeds. You will need to come to an agreement over her entitlement to the house.

You may wish to consider entering into a Cohabitation Agreement as this will protect both parties’ interests. A Cohabitation Agreement is a legal agreement for couples that are not married or in a civil partnership but simply live together. The agreement can cover issues such as the ownership of property, household costs and what would happen to your shared assets if the relationship was to breakdown.

To speak to Simon Pierson about any aspect of Residential Property Law, please call 01780 750 954 or email simon.pierson@hegarty.co.uk.

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