Q:
How many people can you have in a group mortgage?
A:
The maximum number allowed by law is four.
Q:
I have a bad
credit history. Will this affect my chances of getting a group
mortgage?
A:
Probably not any more than with regular mortgages. If your situation
is now stable, and you have an income, you should have a reasonable
chance.
Q:
What happens if one person leaves?
A:
All members of the group are collectively liable for that member's
payments, and can be pursued by the lender if the payments fall
into arrears. If you can't buy that member's share from them, then
you may have to sell the property.
A:
No. Each member can have any share - but make sure shares are agreed
and defined beforehand in a Declaration
of Trust document.
Q:
Is each member's income counted towards the amount that can be borrowed?
A:
Almost all schemes now include every member's income. However, the
highest one or two incomes are often given a greater weight than
the lower incomes - each bank and building society has its own method
of calculating the amount that can be borrowed.
Q:
Does everyone on the mortgage have to live in the property?
A:
Not necessarily. Some lenders offer schemes designed for families
to buy properties based on (for example) the parents' and one child's
income, for the child to live in.
Q:
How is the profit divided when the property is sold?
One
person might have contributed most of the deposit, but only paid
10% of the mortgage each month. Another may have paid 50% of the
monthly payments, but have contributed no deposit. Work it out before
you sign!
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