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Joint Mortgage vs Joint Ownership: Do You Know The Difference?

Joint mortgages can give you access to more funding for a home mortgage than applying on your own. However, joint mortgage and joint ownership do not mean the same thing. If you're researching how to buy a property jointly, you may also see terms like "joint tenancy" or "tenants in common." Although they sound the same (and may even be used interchangeably), all of these "joint" terms may not refer to a joint mortgage.

Read on for in-depth guidance with purchasing a property jointly and please contact our office for personalized information.

What is a Joint Mortgage?

A joint mortgage is a home loan approved to two or more people.

You'll typically associate this type of loan with married couples. However, joint mortgages can in involve partnerships such as family, friends, or investors who are willing to share the responsibility of the loan.

A joint mortgage allows borrowers to qualify for a more substantial loan amount than they can individually because of combined the total household income and combined credit scores.

Joint Mortgage Disadvantages

All parties on the mortgage share the responsibility, meaning all are equally liable for repaying the loan. It also means that all share the implications of negative or positive credit activity as a result of loan management.

Additional Things to Consider

Disputes or ending of partnerships can complicate joint mortgages. For example, one may agree to a quitclaim deed, relinquishing ownership of the property; however, it may not affect the mortgage responsibility. So if any person missed a payment, the other(s) would still be responsible for making it, even without any ownership over the property.

Joint Mortgage vs. Joint Ownership

Here is where people often get confused: a joint mortgage shares the responsibility of the loan while joint ownership is determined by the title or deed. Essentially, a person can be a part of a joint mortgage but not own the property.

Conversely, an individual can be on the title of a home (ownership) but not have any of the financial liability or credit impact.

Is one better than the other?

Having a joint mortgage, joint ownership, or a combination depends on financial your goals. They each have disadvantages and significant financial opportunity, too. The important thing is that you have all your questions answered before you commit. Call us today for an obligation-free consultation.