JBSP Mortgage: Lending a Helping Hand

Please Note: Macbeth Financial Services Ltd is not a mortgage lender. As a mortgage broker our job is to find you the best mortgage for your requirements. With regards to a Joint Borrower Sole Proprietor mortgage a one time charge of £495 will be payable prior to beginning a search of the current mortgage market.

Key Takeaways

• Joint Borrower Sole Proprietor (JBSP) mortgage lets up to 4 people combine incomes to increase lending capacity while the buyer remains the sole owner and contributors do not appear on the title.
• JBSP helps applicants who fail affordability checks, including some self employed buyers, and is available for both residential and buy to let purchases.
• Key benefits include higher borrowing power, no 3% second home stamp duty for contributors, no requirement to provide additional security as with guarantor mortgages, and an easy exit once the borrower can afford the mortgage alone.
• Eligibility and limits depend on lenders, with terms often set by the oldest applicant commonly up to age 80, assessments of existing mortgages and credit commitments, and some lenders offering up to 90% loan to value subject to conditions.
• All contributors remain legally responsible for repayments and the debt, and broker services typically include a one time fee of £495 to start a market search for JBSP options.

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 lend up to 90% of the property value – so all you may need is a 10% deposit subject to overall assessment of your situation.
• 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 rachael.clover@macbeths.co.uk