Mortgage with family member

Hello,

I need some advice in regards to taking out a mortgage with a family member. I live in Dublin where i want to buy. I can qualify for so much on my own but still not enough! So the option is to buy with someone else and I would only do so with a family member--My sister who lives in Galway. Our salaries combined would be more than enough.

My question is, do I own the property or does my sister co-own it with me? She has no interest in this property.
I just need her salary added to mine to raise over Euro300,000. I can and would be making the monthly payments on my own.

As a general rule, I advise against people attempting to borrow more than the banks are prepared to lend, unless they have very good reason to believe that their salary is definitely going to increase substantially in the short term. Interest rates are very low at present - they could rise substantially again during the life of your mortgage. How would you cope? If a bank thinks you cannot afford a loan, why do you believe otherwise? Would you not consider waiting until your income has increased or something comes up that is within your price range?

But to answer your direct question, if there is only a small gap between what you want and what you qualify for on your own, your sister could be guarantor in which case she is not a co-owner on the deeds of the house. If the gap is large, lenders will generally want her named as a joint party on the mortgage and possibly the deeds, i.e. to be a joint owner.

In any event, your sister must not only have the income, but she must not be too heavily encumbered with debt herself. This arrangement will also impact on what she can qualify for, if she wants to borrow for herself later.

I agree with Liam. If she is a joint mortgage holder, she will be a joint owner.

You also must thing about if things go sour down the line.. perhaps a row, an arguement..? You really need to sit down and think about what you really want.

In the very recent past it was not unusual for a parent to be a guarantor of a son/daughter's mortgage, but not an owner of the related property.