Should you Buy a Home in a Joint Name?

As a general rule, joint ownership is the better choice, but it’s still helpful to understand why.

As a Married Couple, Should you Buy a Home in a Joint Name?

If you’ve just got married, or if you intend to get married in the near future, then you may be wondering if you should apply for a mortgage in a joint name. This is especially the case if you have one person who earns more, or if your household has a single income. As a general rule, joint ownership is the better choice, but it’s still helpful to understand why.

Income Misconceptions for Married Mortgage Applicants

A big misconception is that if your partner doesn’t have an income, they can’t be on the mortgage. This isn’t true at all. As long as your spouse meets all the other requirements set out by the mortgage provider, you should not have an issue at all. Another big misconception is that if neither of you has purchased a property before, and you buy in one person’s name, the other person can keep their First-Time Buyer Status.

This is a myth which is thoroughly debunked on the HMRC website. In brief, when one person owns a house, their spouse is also treated as a homeowner. If you want to free up money so you can put down a bigger deposit together, then selling the asset you have now is the best way to go. You don’t need to go through the long process of listing your property either, especially if you are excited to start your life as a married couple. Sites like We Buy Any Home allow you to choose your completion date, with a free cash offer within minutes. As you get funds in as little as 7 days, you can put in an offer on a new property that may be of interest, or you can at least put yourself in a stronger position should one hit the market, so you can be in a strong position to buy a marital home.

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Eligibility for Tax Benefits

If you buy a property in a single name, then this can create issues should the owner of the property pass away. You probably won’t be giving much thought to things like this if you have just got married, but at the same time, it’s important to think about the future. The last thing you want is to create unnecessary legal issues. If you opt for joint ownership, then this will open up a lot of possibilities, as if the property is rented out at a later date, then you can open up rental income, which can be divided between the two of you to reduce tax liabilities.

You can also use your Capital Gains Tax Allowance, which opens up even more efficient real estate planning at a later date. You can find more information about that from a financial services resource, such as the Hargreaves Lansdown website. If you have a partner who owned a property before marriage, and it is not the couple’s main residence, then keeping this in a single name will make more sense, but if you intend to buy another property, then it’s better to keep the property application in the joint name.

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