How to Create a Strong Joint Bond Application

How to Create a Strong Joint Bond Application

When purchasing a property, one of the most significant financial decisions you can make is applying for a home loan, also known as a bond. For many, partnering with someone else—whether it’s a spouse, partner, family member, or friend—can make the process more manageable. A joint bond application can increase your chances of securing a larger loan and improve your chances of approval. Here’s how to create a strong joint bond application.

Understand the Basics

A joint bond is a financial arrangement where at least two parties guarantee the repayment of a loan, providing a stronger assurance to lenders. This option is commonly used by business partners, friends, family members, and unmarried couples. Banks are more likely to approve a joint bond because multiple guarantors increase the likelihood of consistent payments. However, it's important to note that in the event one party defaults, the remaining party or parties will be responsible for the entire bond payment, underscoring the need for trust and financial stability among all involved.

  • A joint bond involves at least two parties guaranteeing the repayment of a loan.
  • It can be used by business partners, friends, family members, and unmarried couples.
  • Increases the likelihood of loan approval due to multiple guarantors.
  • If one party defaults, the other(s) must cover the entire bond payment.

Choose the Right Partner

The foundation of a strong joint bond application is selecting the right co-applicant. Ideally, this should be someone with a stable income, a good credit history, and a commitment to the financial responsibilities involved. Ensure that both parties are transparent about their financial situations, including any existing debts or financial obligations.

Assess your combined financial health

Lenders evaluate your ability to repay the loan based on your combined financial health. This includes income, expenses, credit scores, and existing debts. Here are some steps to take:

  • Review Credit Scores: Obtain credit reports for all applicants and review them for accuracy. Address any discrepancies or negative marks before applying.
  • Calculate Debt-to-Income Ratio: Lenders use this ratio to determine if you can manage your monthly debt payments. Calculate your combined monthly income and existing debt payments to ensure they fall within acceptable limits.
  • Prepare Financial Documents: Gather necessary documents such as pay slips, bank statements, tax returns, and proof of any additional income. This demonstrates your financial stability and ability to repay the loan.

Improve your credit score

If one or more applicants have a less-than-ideal credit score, take steps to improve it before applying. This might include paying off outstanding debts, reducing credit card balances, and ensuring all bills are paid on time. A higher credit score can lead to better loan terms and a higher likelihood of approval.

Save for a Down Payment

A larger down payment can significantly strengthen your joint bond application. It reduces the loan amount needed and shows lenders that you are financially responsible. Aim to save at least 10-20% of the property’s purchase price. Additionally, consider setting aside extra funds for closing costs, moving expenses, and any necessary repairs or renovations.

Choose the Right Lender

Research different lenders to find one that offers favourable terms for joint bond applications. Compare interest rates, loan terms, and fees. Some lenders may be more flexible or offer better rates for joint applicants. Consider seeking pre-approval from multiple lenders to understand your borrowing potential and negotiate better terms.

Write a Compelling Application

When submitting your joint bond application, include a cover letter explaining your situation and why you are a good candidate for the loan. Highlight your combined financial strengths, stable income, and commitment to repaying the loan. Providing a clear and compelling narrative can help persuade the lender.

Plan for Future Changes

Discuss potential future changes that could impact your ability to repay the loan, such as job changes, family expansions, or significant expenses. Having a contingency plan shows lenders that you have considered various scenarios and are prepared to handle them responsibly.

Seek Professional Advice and Draw Up A Contract

Consider consulting with a financial advisor or mortgage broker. They can provide valuable insights, help you navigate the application process, and suggest strategies to improve your chances of approval.

A contract is crucial in a joint bond arrangement as it clearly defines the responsibilities and obligations of each party involved, providing legal protection and reducing potential conflicts. It outlines the terms of the loan, repayment schedules, and the consequences of default, ensuring that all parties understand their commitments. Additionally, a well-drafted contract can specify how payments are to be managed, how ownership interests are divided, and how disputes will be resolved. This clarity helps maintain trust and cooperation among the parties, safeguarding their financial interests and ensuring the smooth management of the bond.


A strong joint bond application requires careful planning, transparency, and financial discipline. You can increase your chances of securing a home loan by choosing the right partner, assessing your combined financial health, improving credit scores, saving for a down payment, and crafting a compelling application. Remember, preparation is key—start early and stay organized to achieve your goal of homeownership.

If you're considering buying a property from M&T, our Bond Originating department is here to assist you. We provide expert guidance throughout the bond application process to ensure a smooth and hassle-free experience. For more information and personalized assistance, please get in touch with our team via our M&T Contact Page. We're committed to helping you secure your dream home with ease.

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