Consumers are more likely to have a joint mortgage with a partner or spouse than have a mortgage on their own, according to the research from Equifax, the credit information provider.
The research among 851 people found that 61 per cent of respondents have a joint mortgage and 56 per cent who do not currently have a mortgage are planning to buy with a partner or spouse.
Neil Munroe, external affairs director at Equifax says the prevalence of joint purchasers highlights the importance of home buyers being fully aware of their partner’s financial situation before entering a joint agreement.
Munroe explained: “It is vital that anyone planning to apply for a mortgage with a partner has discussed their financial status before entering this agreement. If you have a joint financial agreement with a partner, then their credit information will be linked to yours for as long as that agreement exists.
“Although it is positive that over half of people who do not have a mortgage (54 per cent) say they know their partner has a good credit rating, it is crucial that this is confirmed by each partner checking their credit report – and perhaps even sharing it with each other.
“Lenders look at all the financial commitments someone has when new credit is applied for – and if there are joint financial agreements they are more than likely to look at the credit history of the partner too.”
Importance of credit information
The Equifax research revealed a high level of awareness amongst home buyers of the importance of their credit information, with 71 per cent of those who had applied for a mortgage in the last year saying they obtained a copy of their credit report before shopping around for a good deal.
And this appeared to help in their applications with the same percentage saying they only made one application to secure the funding.
Consumer mortgage spending habits
More than half (55 per cent) of respondents said they are not currently planning to over-pay on their mortgage even though interest rates are low.
Illustrating the value of the government’s Help to Buy Mortgage Guarantee scheme due to come into place next year, the main reason that individuals currently do not have a mortgage was that they cannot afford the deposit.
Comment
Munroe continued: “It was interesting to see that three quarters of respondents (75 per cent) are not getting financial help from their parents or family members towards their property purchase.
“With no one else to rely on for their funding it is therefore even more crucial that individuals check their own credit report before embarking on the application process.
“And if they are taking out a joint agreement, it’s worth talking to their partner about their financial status, so that they can understand exactly how a lender will view their combined application.”
The Equifax app is available free from the Apple iTunes Store on iPhone and iPad and from Google Play for Androids.
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