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What Is a Joint Mortgage?

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Christy Bieber
Robin Hartill, CFP
By: Christy Bieber
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Christy Bieber
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Christy Bieber is a full-time personal finance and legal writer with more than a decade of experience. She has a JD from UCLA as well as a degree in English, Media and Communications with a Certificate in Business Management from the University of Rochester. In addition to writing for The Ascent and The Motley Fool, her work has also been featured regularly on MSN Money, CNBC, and USA Today. She also ghost writes textbooks, serves as a subject matter expert for online course design, and is a former college instructor.

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 and  Robin Hartill, CFP
Robin Hartill, CFP
Robin Hartill, CFP
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Robin Hartill, CFP®, is The Ascent’s Head of Product Ratings and has worked for The Motley Fool since 2020. Her work has appeared in various national publications, including Yahoo! Finance, NerdWallet, Investopedia, CNN Underscored, MSNBC, USA Today, and CNET Money. She previously wrote The Penny Hoarder’s syndicated “Dear Penny” personal finance advice column. She is based in St. Petersburg, Florida.

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If you're buying a home with your partner or spouse or you're helping your adult child become a homeowner, you may be interested in a joint mortgage. A joint mortgage is a mortgage loan you share with someone else. In joint mortgages, you share legal responsibility for the loan with the other co-owners of the home.

There are many benefits to joint mortgages. For example, a joint mortgage could help you buy a home you might not be able to afford on your own. Sharing responsibility for the mortgage also makes sense for many couples. But there are also downsides to consider.

Whether you're a first-time home buyer or a seasoned pro, it's important to understand what's involved in securing a joint home loan. If you've been wondering, "How do joint mortgages work?" you're in the right place. Here's what you need to know.

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What is a joint mortgage?

A joint mortgage is a mortgage multiple parties obtain together. The finances of each co-applicant determine loan approval and loan terms. All of the parties on the joint mortgage share legal responsibility for paying back the loan.

Note that joint mortgages are not the same thing as joint ownership. The mortgage determines who makes loan payments; the property title determines who owns the property.

Individuals often take out a joint loan with a partner. Some parents sign onto a joint mortgage when their child is a first-time home buyer who doesn't have enough credit history to qualify on their own. People who are buying a home with family or friends may also take out a joint mortgage.

There can be more than two people involved in a joint mortgage. There's often a maximum of four or five parties allowed (although this varies by lender). Usually, when multiple people take out a joint mortgage, they will all share the ownership of the property they're borrowing to buy. However, you can sign your name on a joint mortgage even if you're not listed as an owner on the property title.

How does a joint mortgage work?

In a joint mortgage, all co-mortgagees are legally responsible for the entire loan. This means if you sign a joint mortgage with your child and your child can't afford the mortgage payment, the lender could try to collect the entire payment from you.

When you apply for a joint mortgage, you and the other person(s) you're sharing the loan with will each submit an application. The lender will review several key qualifying criteria from each co-borrower, including:

  • Income
  • Credit scores
  • Debt
  • Assets in reserve
  • Employment history

If the lender approves your joint mortgage loan, you will each sign the promissory note. At that point, you each become responsible for making payments. You'll generally have to make just one joint monthly payment.

Which credit score is used for a joint mortgage?

When individuals apply for joint mortgages, the lender looks at the credit scores of all applicants. However, many lenders base mortgage rates and terms on the applicant with the lowest credit rating.

Lenders often determine the "lower middle score" for the loan by considering each applicant's score from the three major credit bureaus. Let's say you have credit scores of 755, 742, and 727, while your partner has credit scores of 684, 677, and 662. Your lender would likely use your partner's 677 score to determine your mortgage terms.

Since your credit score impacts your mortgage rates, you'll want to make sure you and all co-borrowers have done everything you can to improve your credit before borrowing.

Lenders may be more willing to lend to a bad-credit borrower if the other borrower(s) have good credit. However, they'll still consider it to be a riskier loan. One borrower's bad credit could affect both your ability to secure a loan and the rate you are offered.

Will my credit score be affected?

Yes: Joint mortgages with co-borrowers show up on each borrower's credit report. If you pay back the loan responsibly, it can help to raise your credit score. But if you or your co-borrower miss a payment, it can adversely affect both of your credit scores.

When you apply for a joint mortgage, the lender will make a hard inquiry on your credit report. Too many hard inquiries can have a small negative impact on your credit score. However, many lenders allow you to shop around and get prequalified for a loan without a hard credit check. This allows you to compare loan terms and find the best mortgage lenders without worrying about harming your credit.

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Should you get a joint mortgage?

There are both advantages and disadvantages to joint mortgages. Here are some reasons you may or may not want a joint mortgage.

Advantages of a joint mortgage

  • Possible better rate: You may be able to qualify for a mortgage loan at a better rate if your co-borrower has solid financial credentials.
  • Larger loan: You may be able to borrow more than you could afford alone. The lender considers your combined income when determining whether to approve your loan.
  • Shared responsibility: You and your co-borrower share legal responsibility for the loan. If you are buying a house with someone, you can ensure you're both on the hook to pay for it.

Disadvantages of a joint mortgage

  • Possible lower rate: If your co-borrower has a lot of debt or a low credit score, you may not be able to get approved for a loan at a favorable rate.
  • Credit risk: You could face consequences, including damaged credit and legal action, if the co-borrower doesn't live up to their repayment responsibilities.
  • Ownership confusion: Joint borrowing doesn't always mean joint ownership. You'll want to make sure your name is on the title and deed to the house so you are a co-owner of the home as well as a co-borrower on the mortgage.

Before taking out a joint mortgage, make sure you understand the difference between a promissory note and the title and deed of the home. You probably won't want to commit to paying back a home loan if you don't have a legal ownership interest in the property.

If you are considering purchasing a house with another person, a joint mortgage often makes the most sense. But consider the impact of co-borrowing on your ability to secure a loan when you decide what's right for you.

Once you've done that, be sure to shop around and compare current mortgage rates to find a loan that's right for all parties involved.

Still have questions?

Here are some other questions we've answered:

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FAQs

  • A joint mortgage is a secured loan multiple parties obtain together to purchase a home. All co-borrowers are jointly responsible for repaying the loan and the lender considers the credentials of each one when determining loan terms and rates.

  • A joint mortgage can be a good idea if you want to buy a home with someone else and share legal responsibility for paying off the mortgage. If your preferred co-borrower has strong financial credentials, applying jointly can help you secure a better home loan.

  • Yes, but most lenders will require you to pay off the loan in full or refinance and obtain a loan in your name only.