4 Person Mortgage
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Your home may be repossessed if you do not keep up repayments on your mortgage
4 Person Mortgage
Lee Sutton talks to us about how a four-person mortgage works.
Can I get a mortgage with four people? Can a house be owned by four people?
There’s no specific four-person mortgage or a product called a multi-person mortgage. It’s just that standard mortgages can be applied for jointly by up to four individuals. Each lender has different branding and how they might refer to this.
But you can get a four-person mortgage, and four people would in theory jointly own a property. Or, you just have four names on the mortgage. There are options either way.
Can you get a mortgage with friends?
Absolutely. Some lenders are comfortable with that while other lenders would require it to be a blood relative like a brother or sister.
How do mortgages with four or more applicants work?
When you apply for a mortgage with four applicants, it works the same as any normal mortgage. All the borrowers are jointly responsible for ensuring that the mortgage payments are made.
If there’s an issue, lenders would deal with it in exactly the way they would a two-name mortgage.
You can judge whether you want a fixed rate or a variable rate, and decide how you want your payments, mortgage term and affordability.
One difference is that the oldest borrower can have an impact upon the mortgage term. If you’re looking at this, you really should chat with a mortgage broker because much as lenders are offering it, you want to make sure that you go to the right one.
What deposit do you need and how much can you borrow with four people on a mortgage?
You can go up to 95%, so a 5% deposit is possible. How much you can borrow will be based upon how much you earn, and the bigger the deposit you have, the better rate you get.
You’d be looking at between 4.5 and 5.5 the combined incomes – and at a push six times – so it really can give you a lot of extra affordability.
What documents do you need with four people on the same mortgage?
There are no differences. You would still need to prove your income and show evidence of the deposit and proof of ID. Those are standard requirements, the same as for a traditional mortgage.
Does it cost to add someone to a mortgage?
Yes, and depending onwhat you’re looking to do, it’s not necessarily straightforward. There could be a charge with the lender, and potentially also a charge for legal work that’s required.
If you were looking to remortgage and add somebody on, it would be worth having a chat first to make sure you’re not going to incur stamp duty and find out what fees may be involved.
Do you pay stamp duty when adding someone to a mortgage? Are there any other costs involved?
If you’re adding someone to the mortgage, you may have a stamp duty liability. It would depend on property value, loan amount and whether the person had a mortgage of their own in the past. It’s not a straightforward yes or no.
Adding someone to the mortgage changes the ownership of the property, which needs to be reflected in the title deeds. That’s where there would be legal work to pay for – and that in itself may then trigger a stamp duty cost.
It depends where you live in the UK, as well. England, Wales and Scotland have different stamp duty thresholds. There would potentially be a charge – but that would be one of the things we would look at to find out whether it’s worth doing the transaction.
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What are the pros and cons of having four people on a mortgage?
If there are four people on a mortgage together, you’ve got four lots of income and hopefully four lots of savings. Four people might be able to come up with a reasonable deposit, and then we would hope that would get them a better rate.
Potentially, then, you could buy a bigger property. Rather than a one-bed, you might buy a two-bed flat, for example. Whether you’re planning to live together or rent a room out, investing in property can have huge financial benefits.
On the downside, your credit will be linked to your co-applicants’ credit scores – so if anybody has something untoward on their credit file, that can have an effect on everyone else’s ability to borrow further in the future. It’s something that you need to think carefully about.
There’s a number of ways in which you can do this. Whether it be four people buying together in a standard way, or whether you’re looking at a Joint Borrower Sole Proprietor. So there’s a number of ways you can help the client get the property they want.
Which lenders offer mortgages to groups of four or more people? Are there many?
There are a number of them, depending on how you want to do it. Some of the smaller building societies offer four-named mortgages. There’s also Barclays and Metro, who offer Joint Borrower Sole Proprietor schemes. There’s a raft of options out there [information correct at time of recording in January 2025].
How do you get a multi-applicant mortgage or a mortgage for four people? How can a mortgage broker help here?
In exactly the same way we would on a standard mortgage. We would have a chat with all the applicants, find out their needs and goals and then look for the mortgage to suit the client’s criteria.
We will explore the clients’ criteria, the deposit, whether they are looking for the very best rate or to try and borrow as much as they can. Those factors could mean we look at totally different lenders, so we would find the best deal out there for the clients’ needs.
We would get an Agreement in Principle to make sure that the lender was happy with all parties. If everyone accepts our advice, we would then process that to a full application and manage it from start to finish.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Initial Consultations are completely free of charge. There’s no obligation to proceed and our broker fee will only become payable if we proceed to a full application. The precise amount of the fee will depend on your circumstances and will be discussed and agreed with you at the earliest opportunity. Typically, in most cases, our fee will be £495. We charge £595 for bridging and adverse credit cases; and £995 for Later Life Lending.
Mortgage Style Ltd is registered in England and Wales. Registered Number 5743648. Registered Office: Elm Tree Farm Estate, The Sheepway, Portbury, Bristol, BS20 7TF.
Mortgage Style Ltd, trading as Mortgage Style, is an appointed representative of the HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority.