Joint Borrower Sole Proprietor Mortgage (JBSP) – Lending a Helping Hand

Put some weight behind your mortgage application.

For most young first time buyers, buying a property is hard. House prices have risen massively and affordability and sustainability checks remain comprehensive. Saving for the deposit and being able to manage the monthly repayments is without doubt a tough task. Being able to help your child establish themselves in the property market is something any parent would want to be able to do if they could, and with a Joint Borrower Sole Proprietor (JBSP) mortgage they can do just that.

It’s a frustrating and common story. The applicant has been renting for a number of years and can ‘afford’ a mortgage, but due to circumstance is unable to satisfy the necessary affordability checks. It could be that they are self employed for example. Being able to include the income of close family members in a mortgage application is going to broaden the opportunity to get on that ladder.

A joint borrower sole proprietor mortgage allows up to 4 people, usually close family members, to contribute to the application and repayment of the mortgage, importantly, without appearing on the deeds. Allowing multiple applicants obviously maximises the mortgage lending capacity. The buyer remains the sole owner of the property.

Joint borrower sole proprietor mortgages are not limited to first time buyers. Joint Borrower Sole Proprietor mortgages are available to both residential and buy-to-let applicants.

You’re Never Too Old (nearly)

Borrowers can be up to 80 years of age. So it’s not just a case of parents lending a helping hand, but grandparents also! All applicants will remain responsible for the mortgage repayments and the debt owed.

A JBSP mortgage is unlike a more traditional joint mortgage in that a joint mortgage requires all applicants to be on the deeds of the property. This may not be desired for a number of reasons, some of which are outlined below.

Benefits of a JBSP mortgage:-

  • Greater scope for your child to increase their borrowing capacity and get their foot on the property ladder
  • You will not be liable for the second home 3% stamp duty charge as you will not be on the title deeds.
  • Unlike a guarantor mortgage you will not have to put up additional security- your home or savings.
  • Leaves an easy exist strategy once the applicant is able to afford the mortgage on their own.

Eligibility for this:-

  • The term of the mortgage will be defined by the age of the oldest applicant – some lenders will lend up to the age of 80
  • Your own mortgage (if you still have one ) and financial credit commitments will be taken into account to determine the mortgage lending offered.
  • Some lenders will allow 95% loan to value – so 5% deposit only.
  • Some lenders will have a minimum property value and a maximum loan value.

 

For more information on Joint Borrower Sole Proprietor Mortgages, you can speak with Rachael Clover directly on 01189 235 097 or email at rachael.clover@macbeths.co.uk 

Author: Rachael Clover | July 24th, 2019

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Rachael Clover
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767   info@macbeths.co.uk