Joint Borrower Sole Proprietor Mortgages
If you are finding it tricky to get a mortgage on your own, perhaps due to insufficient income, you could consider buying with someone else. You might not want to jointly own a property with another person, but there is a mortgage option that could work for you to help you get on the property ladder.
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Simmonds Mortgage Services, joint borrower sole proprietor mortgages
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What is a joint borrower sole proprietor mortgage (JBSP)?
A joint borrower sole proprietor mortgage (JBSP) is a type of mortgage product that allows multiple individuals to apply for a mortgage together, with only one or two of them listed as the legal owners of the property.
This product enables individuals who may not meet the stringent income or credit requirements on their own to obtain financing with the support of additional borrowers.
How do joint borrower sole proprietor mortgages work?
The sole proprietor, or sole name on the deeds, is the legal owner of the property and takes responsibility for maintenance and upkeep. The joint borrower or borrowers support the legal owner in their application by agreeing to help with mortgage payments. They bring their assets and income to back up the sole proprietor’s application. The joint borrowers are not legal owners and have no legal claim to the property. Their names do not go on the deeds.
A joint applicant is typically a parent, grandparent, or other family member who will help make mortgage payments using their combined income with the sole proprietor. Both have joint responsibility for ensuring that monthly repayments are made on time, but only the sole proprietor can make decisions about the property, such as deciding to sell.
What is the mortgage application process for JBSP?
The mortgage application process for a JBSP mortgage is similar to that of a traditional mortgage. The primary applicant and joint borrowers gather the necessary documentation, including proof of income, bank statements, identification, and credit history. They will need to complete a mortgage application and submit it to the mortgage lender.
During the application review process, the lender evaluates the combined financial profiles of all applicants to assess the overall affordability and creditworthiness against their lending criteria. If approved, the sole proprietor will take legal responsibility for the property, while all applicants are equally responsible for the mortgage repayments. Some mortgage lenders will approve up to four applicants on the same loan.
Joint borrower sole proprietor mortgage eligibility
To be eligible for this type of mortgage, all applicants must meet all the criteria set by the lender. It may be more difficult to meet all the lending criteria when you have more than one person applying. Specific requirements may vary depending on the lender, but working with experienced mortgage brokers like Simmonds Mortgage Services will help you understand the different products available.
How many people can be on a JBSP mortgage?
Most lenders will only allow up to four people on a JBSP mortgage: the sole borrower (sole property owner) and up to three additional people to support with mortgage repayments.
What is the age limit for a joint borrower sole proprietor mortgage?
Age limits for JBSP mortgages vary among lenders, but they usually range from 70 to 80 years old for the oldest borrower.
Some lenders may be more flexible and open to unique circumstances, so don’t let age put you off. Simmonds Mortgage Services has experience sourcing joint borrower sole proprietor mortgages for clients of all ages. Take a look at how we successfully helped a retired couple in their 80s save their home from repossession with a JBSP mortgage.
Here’s what they had to say about us:
“Where to begin?… When you are at wit’s end and have no open route to follow, it is a huge relief to be wrapped in the secure knowledge that Simmonds Mortgage Services are ready, willing, and more than able to guide you through the mortgage maze toward a successful conclusion.”
– Mr. Golding
Who can benefit from a JBSP mortgage?
A joint borrower sole proprietor mortgage might be the mortgage solution for you if you need additional support to get on the property ladder or repay your mortgage. They are suitable for various property purchases, including:
First-time buyers in need of financial assistance from parents or family members
Young professionals with lower salaries who need a financial boost
Individuals with poor credit history to support their affordability assessments
Retired homeowners looking to remortgage
If you own a background property and therefore do not want to go onto the deeds of a second, additional property
Get in touch with Simmonds Mortgages Services today
Simmonds Mortgage Services has access to a broad selection of high-street mortgage lenders and private specialist lenders. We help clients increase their borrowing capacity and buy their dream properties with specialist JBSP mortgages.
Call us now on 01184 693 037, and let’s talk about potential mortgage solutions for your situation.
Frequently asked questions about joint borrower sole proprietor mortgages
What is the difference between a joint mortgage and a joint borrower sole proprietor mortgage?
A joint mortgage means that both borrowers have legal ownership of the property, unlike a JBSP mortgage, where there is only one legal owner. Joint mortgages create a beneficial interest in the property for all borrowers, whereas JBSP products do not.
What is the difference between a guarantor mortgage and a joint borrower sole proprietor mortgage?
A guarantor mortgage is where someone else, usually family members, agrees to take on responsibility for your monthly payments if you are unable to keep up repayments. Guarantor mortgages give no rights of ownership to the guarantor, just like a JBSP mortgage. A guarantor tends to be a parent.
Can a first time buyer get a joint borrower sole proprietor mortgage?
Yes, some lenders offer JBSP mortgages to first-time buyers.
Can a married couple get a joint borrower sole proprietor loan?
Yes, a married couple may be able to get a JBSP mortgage, with one party having sole ownership and the other as the supporting borrower, also known as a non-proprietor. With many JBSP mortgage lenders, there is no stipulation that there should be a close family relationship between the sole owner and the non-legal owner for them to borrow money together.
Can a guarantor cover mortgage payments in a JBSP mortgage?
A guarantor on a mortgage agrees to become responsible for making monthly payments only if you, as the legal owner, are unable to make the payments.
Is there a Stamp Duty liability for joint borrowers?
Stamp Duty is a complex subject, so we always request that you seek independent tax advice. If your name does not go onto the deeds, then your circumstances usually don't go towards the Stamp Duty liability. However, this is different for married couples. For example, a first-time buyer, with a parent supporting the mortgage via JBSP or guarantor, would usually pay a first-time buyer Stamp Duty rate as the person not on the deed is then ignored.
The same rule usually applies to Capital Gains Tax when selling JBSP property.
However, tax is complex, and we do not advise in this area, so please seek advice.
What are the risks involved?
As with any financial arrangement, you should assess the potential downsides. Joint borrowers might fall out, making it difficult to maintain the financial relationship. If you have older borrowers, this could limit the mortgage term, making monthly repayments higher than standard mortgages.
Being jointly liable for a larger mortgage could put your relationship under significant strain, so think carefully about whether this is the right approach for you and your joint borrowers.
It is also important to obtain independent legal advice to ensure all parties are satisfied before entering the agreement.
What happens if the sole proprietor fails to pay mortgage repayments?
All parties are liable in a JBSP mortgage. This means that if the sole owner fails to pay the mortgage, the responsibility will fall to the other joint borrowers.
Looking for a different mortgage product? See our mortgage service for Houses in Multiple Occupation
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