It is normal to have a shared mortgage with your partner, in which fixed payments must be made in each established term. Due to this, this article explains the advantages of this type of mortgage and also the drawbacks they present.
The shared mortgage allows payments to be made in installments between the couple
Shared Mortgage
When a couple makes the purchase of a specific home, they have the option of using the shared mortgage, since this consists of facilitating obtaining the mortgage that presents less risk of defaulting on the loan, since it is considered that the couple has of greater financial stability.
A case that can be considered common is that the couples are not related by marriage, nor by a registry, but they do have a link through this shared mortgage of a home. In this loan, it is arranged that each person covers a part of the debt, so an amount is divided so that the couple can cover the expense, either in equal parts or that one member has a higher amount.
If the situation arises in which the agreed payment is not made, the couple must present themselves to respond to the full debt, for which the goods and assets they have and those that are going to have to supply the quota established in the mortgage must be delivered. . Due to this, it is recommended that before proceeding with this loan, you have the responsibility and the guarantee that the amount set in the required installments will be paid.
If you want to know the real value of a product or a service, then it is recommended to read the article of Interest rates
Advantages and benefits of the mortgage
The shared mortgage facilitates obtaining the loan and the payment that must be made by the couple in specific terms and indicated in the corresponding banking entities. The advantages that this financial operation brings are very important when purchasing a home, which is why the essential benefits obtained with this loan are going to be presented below:
Possibility of entering the credit
- By signing a shared mortgage, it is easier for the banking institution to grant the mortgage
- The possibility is increased in the event that the members of the couple present financial stability
- For this, they must certify the work and the salary they obtain
- In order to ensure the payment of the loan in the established terms
Lower risk of defaulting on payment
- There is a situation in which a member of the couple leaves his job or for some reason cannot continue working
- To meet the mortgage payment, you must depend on the income obtained by the member of the couple who is still working
- In this way, the risk of not complying with the payment and presenting legal problems is avoided.
Increase in borrowing capacity
- In the event that the couple work and have their own income, the possibility that the shared mortgage loan will be greater increases
- So you can get a bigger house with a higher amount
- The income of the couple is added and the amount that can be given is analyzed
- Must meet the condition that the loan does not exceed 35% of the couple's income
Disadvantages and complications generated by the mortgage
Just as the shared mortgage has many advantages and benefits, it also has disadvantages that mainly occur when the couple no longer continues with the relationship, but by law they must continue with the payments of the given loan. That is why the following are the main disadvantages that can occur in these situations:
Mortgage payment complications
- There is a possibility that the income available to one member of the couple cannot cover the expenses of the installments within the established periods.
- There is the possibility that even if they do not continue as a couple, both maintain the corresponding payments until they fulfill the debt acquired in the loan.
- An agreement can also be reached with the bank to establish new terms or to seek a solution through business with the client.
- Another option is that after paying the debt in full, another legal process is sought to see who keeps the house.
- In turn, you can negotiate with the person to avoid legal problems and decide who is going to keep the house or if a sale is going to be made.
Trouble getting out of mortgage
- Difficulty arises at the time that the ownership of the mortgage has to be eliminated
- This is because the bank loses the guarantees of paying the loan debt
- For these cases, you should talk to the bank and find a solution, since the money given must be paid, but due to various situations, an agreement can be reached that is advantageous for the client.
If a loan is requested and it is going to be paid through a deposit, then it is recommended to read the article of Bank deposit
Process to get out of the mortgage
When the couple does not continue in a relationship, many problems arise with respect to the shared mortgage, so it is generally sought to get out of this loan, this process being very complicated. This is due to the fact that the banking entities do not easily agree to lose the mortgage holder since the repayment of the loan money is lost.
It is not essential that the person is not the owner of the home but that he or she will no longer be the holder of the mortgage, generating legal problems with various legal institutions. That is why the following are the steps that must be followed to get out of the shared mortgage without any legal problem:
- The first thing to do is sell the house
- In the event that neither member of the couple wishes to keep the house, it can be sold to a third party.
- It is considered as a simple option to avoid problems with the couple or with the bank.
- With the money from the sale of the house, the mortgage debt is paid off
- Another option that can be followed is to buy the other part of the house that the other member of the couple has
- For this you must pay part of the corresponding fee so that you can keep the house
- An option that is also recommended is to carry out an extinction of the condominium
- In this way, the rights of the home are transferred to the other member of the couple