My Partner Is A First Time Buyer, But I’m Not – How Does This Affect A Mortgage Application?

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Joint mortgages present an excellent opportunity for partners to combine their incomes to afford a mortgage for their dream home. However, if one of the partners isn’t a first-time homeowner, this can significantly affect the mortgage application. That’s why many people ask, “​​My partner is a first-time buyer, but I’m not. How would this affect our application?”.

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If you want to understand how being a current or previous homeowner affects your joint mortgage with your first-time buyer partner, read below. We’ll break down all the considerations you need to keep in mind while applying for such a joint mortgage. 

If you want to work with a specialist joint mortgage broker to obtain the perfect deal for your specific situation, then use When the Bank Says No today. That way, we can provide you with tailored advice and a plan to secure the best possible deal. We’ll also assist you in overcoming any issue you might encounter during the application process.

Should Both Applicants for a Joint Mortgage Be First-Time Buyers?

When buying a home with your partner, both of you don’t need to be first-time buyers. 

It’s acceptable for one partner to be a previous or current homeowner. However, if one of the partners has owned property before, both partners lose their first-time buyer status. 

In this case, you’ll miss out on some valuable benefits. These advantages include:

  • Stamp duty relief for properties worth below £450,000
  • Low down payments 
  • Governmental aids especially designed for first-time buyers
  • More competitive mortgage rates

Do Couples Qualify as First-Time Buyers If One Partner Has Owned a Property Before?

For partners to be considered first-time buyers, neither should have ever owned a home. If either of them doesn’t meet this condition, both partners are considered not to be first-time buyers.

As a result, they aren’t eligible for most governmental incentives and many buying schemes that offer facilitations.

Do We Qualify for Any Financial Help If My Partner Is a First-Time Buyer, but I’m Not?

If you’ve owned a property before, you don’t qualify for many financial help options. However, one of the options available to you is the shared ownership scheme.

This scheme allows you to buy a share of the property if you can’t afford to buy it entirely. You will pay rent on the part you don’t own.

To be eligible for shared ownership, you need to show you can’t afford to buy a property without receiving aid. In addition, your annual income needs to be below £80,000, or £90,000 in London.

That said, it’s not recommended to go for shared ownership. That’s because it’s highly likely you won’t own the entire property in the future. That way, you would be liable for long-term rent and various fees associated with regular service charges.

Do You Pay Stamp Duty When One Partner Isn’t a First-Time Buyer?

Unfortunately, yes. The only way to qualify for a stamp duty relief is when both borrowers are first-time buyers.

If one of the partners isn’t a first-time buyer, you’ll need to pay stamp duty if the property is worth more than £250,000.

Stamp duty ranges between 5% and 15% of the property’s overall value. Below are the rates which started in September 2022 and are set to run until March 2025. If you buy the new home to be your primary residence, this is what you’ll pay:

Property Value in £ Stamp Duty Rate
Up to 250,000 0
250,000–925,000 5%, paid on the 675,000 above 250,000
925,000–1.5 million 10 %, paid on the 575,000 above 925,000
Over 1.5 million 12% on the amount above 1.5 million

 

If you buy the new home as a second home besides your current one, this is what you’ll pay:

Property Value in £ Stamp Duty Rate
Up to 250,000 3%
250,000–925,000 8%, paid on the 675,000 above 250,000
925,000–1.5 million 13 %, paid on the 575,000 above 925,000
Over 1.5 million 15% on the amount above 1.5 million

What If Your Partner Applies for the Mortgage Alone?

You might be considering taking advantage of the first-time buyer’s stamp duty relief by making your partner the only applicant for the mortgage. However, this isn’t a good idea for multiple reasons:

  1. In this case, only your partner’s income would be taken into account. This will likely limit mortgage affordability because your partner’s income alone can be low.
  2. If any dispute arises in the future between you and your partner, you will be in trouble. That’s because you don’t legally own any equity in the home, even if you indirectly contributed to the repayment.
  3. If you and your partner plan to live together, you should consider upfront what you’ll do with your other property. You need to think about the tax considerations involved.

Given all these factors, relying solely on your partner’s application for the mortgage to receive the stamp duty relief might be a disadvantageous decision. 

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Can You Use a Lifetime ISA When One of the Partners Isn’t a First-Time Buyer?

Fortunately, your partner can use their lifetime ISA to pay off the mortgage even if you aren’t a first-time buyer.

Nevertheless, it’s not allowed for your partner to use a lifetime ISA to purchase a property worth over £450,000.

If they try to do so, they’ll be penalised by paying a fee of up to 25%. This fee represents the governmental contribution percentage for these accounts. 

As for you, you can’t use a lifetime ISA for this property purchase as you’re a homeowner.

What Does the Mortgage Application Look Like When One Partner Isn’t a First-Time Buyer?

The application process for a mortgage, when one of the partners isn’t a first-time buyer, isn’t complicated.

Like any joint mortgage, you and your partner will apply and provide all the required documents. Then, the lender will check your income and that of your partner to determine the affordability of the mortgage. 

Both of you must have a stable stream of income to be able to secure a mortgage. In addition to your current finances, the lender will also look at the following: 

Deposit Size

Lenders usually require a deposit of around 10% for a joint mortgage

Still, providing a higher deposit increases your chances of successfully securing the mortgage. 

Employment Status

Most lenders prefer both partners to be employed as they consider it a sign of financial stability. 

However, there’s still a chance to secure the mortgage if one or both partners are self-employed.

Credit Record

The lender will review the credit records of both applicants. Neither you nor your partner should have a credit issue or a bad credit score

If you or your partner have a bad credit score or any related issue, you can contact one of our bad credit mortgage specialists for help. They can help you overcome these problems and secure the best mortgage deal.

Living Expenses

The lender will consider the regular expenditure of you and your partner. They’ll also consider the debt-to-income ratio. 

If you or your partner’s outgoings are relatively high compared to your income, this decreases your chances of securing the mortgage. 

That said, if you’re self-employed or have any issues with the abovementioned factors, you can contact one of our financial advisors for help.

Our joint mortgage experts have years of experience guiding partners in applying for and successfully obtaining the desired mortgage. They’ll help you boost your chances of getting a mortgage.

How Much Can You Borrow with a Joint Mortgage? 

Lenders typically offer joint mortgages of approximately 4-5 times the combined annual income of the partners. The same applies when your partner is a first-time buyer, but you’re not.

For example, if you earn £40,000 and your partner earns £45,000, you can expect a mortgage between £340,000 and £425,000. 

The value of the home you can purchase is the sum of the mortgage amount and the deposit. You can use our mortgage calculator to calculate how much you can borrow.

To do so, you only need to enter the combined income of you and your partner and the deposit amount into the calculator.

Joint Mortgages for Partners: FAQs

Who is eligible for first-time buyer benefits in the UK?

Partners are considered first-time buyers only if neither has ever owned property anywhere in the world. In addition, to qualify for first-time buyers’ benefits, the partners should plan to use the home for residency.

If you plan to use the house for investment purposes, you won’t be eligible for many first-time buyers’ benefits or governmental incentives. 

Can I be a first-time buyer twice?

Technically, once you’ve owned a home, you can’t be a first-time buyer again. This is true even if you had to sell your home due to any circumstances.

Still, some lenders may provide you with a few first-time buyer benefits if you haven’t had a mortgage within the past three years. In any case, you’ll still need to pay stamp duty because you’re technically not a first-time buyer. 

Am I considered a first-time buyer if I inherited a property?

Although inheritance doesn’t involve a purchasing transaction, the government considers you a homeowner when you inherit a property. This means you will lose your first-time buyer status.

That way, you won’t qualify for first-time buyers’ benefits, including stamp duty relief. However, if your inherited property is purely commercial, you will maintain your first-time buyer status and advantages.

Can I lie about being a first-time buyer?

Besides being unethical, lying about being a first-time buyer isn’t a good idea. That’s because, if you do so, you will undoubtedly lose your chance of obtaining the mortgage now and maybe in the future.

When you apply for any first-time buyers government scheme, you have to sign a declaration confirming that you’re a first-time buyer. The lender, in return, conducts some checks to verify your status.

It’s ridiculously easy for lenders to determine whether you’re a first-time buyer. They can do so by searching the land registry database for your name. They may also check your credit history to review whether you’ve had any previous mortgage or paid stamp duty.

You’ll be in trouble if the investigations reveal that you aren’t a first-time buyer. So, it isn’t worth the risk. It could even amount to a criminal offence, so lying about being a first-time buyer on an application is something you should absolutely avoid. 

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“My Partner Is a First-Time Buyer, but I’m Not” Summary

If you’re a current or previous homeowner, you and your partner lose the first-time buyer status, meaning you’ll lose all the benefits associated with this status. As a result, you’ll need to pay stamp duty for your new home, for example. 

However, since your partner is a first-time buyer, they can use their lifetime ISA to pay for the mortgage. 

It’s also worth noting that the application process will be similar to that of any other joint mortgage application – regardless of whether you’ve owned a property before and your partner hasn’t. The lender will likely offer you a mortgage value of 4–5 times the combined income of you and your partner. 

If you want to secure the best joint mortgage deal with your first-time buyer partner, then you can speak with one of our mortgage experts today. They’ll help you navigate the options and find the deal that suits your needs and objectives best.

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Emma Jones
Emma Jones
Emma began her career in Lloyds Banking Group, first in the unsecured & secured loans department at Halifax and later as a mortgage advisor at Lloyds. During 9 years in these roles and a further 2 years at Yorkshire Building Society, Emma was able to observe the impact of the recession, and how the banks let their customers down by denying loans and mortgages. Wanting to be a driving force for change, she stepped into a market advice role where she has been able to help clients when others couldn’t. Identifying a gap in the mortgage space, Emma went on to establish When the Bank Says No. As a keen property investor, she has been the focus of features in publications including The Sunday Times and This is Money. Emma’s greatest joy is overcoming the low expectations of their customers, many of whom have all but given up on getting a mortgage due. One thing Emma has learned through her own personal struggles is every client must be treated like a human and understood better by advisors and lenders in the industry. “We all have to navigate life events which can ultimately impact your financial status. It shouldn’t mean dreams of homeownership or business growth should have the breaks applied”. Emma and her team’s passion for helping people overcome the challenges they may face when applying for a mortgage have fuelled the success of When the Bank Says No.

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