Mortgages for people who are not married

When a couple decides to take out a mortgage for their dream flat, quite often they also decide to get married. Allow me to debunk this myth. Under the law, a couple in an informal relationship can also take out a loan. How to do it and what conditions must be met? You will find the answer in the article below.

• A mortgage and marriage
• What to do to get a loan?
• Repaying instalments if you split up
• Dividing the property after a split

A mortgage and marriage

The law does not forbid couples in an informal relationship from taking out a mortgage. Banks see it differently: some will grant a loan, while others offer mortgages exclusively to married couples. When lending to a couple who are cohabiting, the bank takes into account their individual creditworthiness, because it treats the couple as two separate households. In the case of a marriage, the bank treats the couple as one joint household. As a result, people in an informal relationship can get a loan, but not one as large as they had hoped. This is because the bank considers that two households generate higher living costs than one household. Remember that when applying for a mortgage you can provide the bank with a certificate of running a joint household. You may manage to secure better loan terms.

What to do to get a loan?

When calculating the loan amount, the bank takes two factors into account: age and the partners' creditworthiness. If the partners are close in age, the bank will grant a loan for a longer period. Conversely, if one partner is much older, the bank may grant a mortgage, but definitely for a shorter period. As for creditworthiness – when the income of one partner is much lower than that of the other, the bank may lower their creditworthiness.

READ ALSO: WHEN IS THE BEST TIME TO BUY A FLAT?

Repaying instalments if you split up

Both marriages and informal relationships can fall apart; these are situations that cannot be foreseen. In that case both parties are obliged to repay the loan, so it is worth choosing a repayment option that is favourable for two. Remember that when you take out a mortgage, ownership does not have to be divided equally. In practice this means that one partner has less to repay than the other, but both parties are still obliged to repay the loan.

Unfortunately, when one party is unable to repay the loan, this unpleasant duty falls on the other. When taking out a loan, a couple, formal or not, agrees to the so-called joint and several liability clause.

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Dividing the property after a split

When a marriage or a partnership breaks down, both parties can sell their current flat and split the proceeds. They can use the funds raised to repay the mortgage obligation. Of course, if one partner is able to buy out the other, they can take over the whole property. In both cases the former partners are obliged to notify the bank of the situation.

Do you and your partner want to buy a flat and take out a mortgage, but do not know how to go about it? Then contact the REMAX Gold agency! Our staff will certainly help you get through the formalities and will also present interesting property listings.