Buying a property as a first-time buyer is far from easy. After gathering the funds for the deposit, you then have to pass the lender’s affordability checks and income multiples, and these can be ruthless. However, if you’ve got a loved one who’s willing to help, a joint borrower, sole proprietor mortgage can help you get on the property ladder and provide some security once you’ve made your purchase.
What is a Joint Borrower, Sole Proprietor Mortgage?
A Joint Borrower, Sole Proprietor mortgage allows you and your loved ones to take out a mortgage together and share responsibility for repayments, but only have the property listed in your name.
This is different from a straightforward joint mortgage, as in a joint mortgage everyone would usually be equally entitled to the property. Additionally, you would not be able to benefit from first-time buyer reliefs if you purchase a property jointly with someone who isn’t a first-time buyer.
You can apply for a Joint Borrower Sole Proprietor mortgage with up to four other people. When you apply, the lender takes into account the income of at least two people (some lenders take all incomes into account), which drastically increases your chances of being approved.
When might a Joint Borrower Sole Proprietor mortgage be a good idea?
You may want to apply for a Joint Borrower Sole Proprietor mortgage if:
- You are on a low income: You can borrow more than you would be able to afford on your income because your lender takes into account the other borrowers’ income.
- You have recently started your own business and can’t prove a stable income alone yet: As long as the other borrowers have a stable income, you won’t have to wait until you can prove that your income is secure to get a mortgage.
- You’ve had a significant financial change: Some lenders will allow you to remortgage into a Joint Borrower Sole Proprietor mortgage if you’re struggling to make mortgage repayments alone.
Who is eligible for a Joint Borrower Sole Proprietor mortgage?
Joint Borrower Sole Proprietor mortgages are primarily designed for first-time buyers, but you don’t need to be a first-time buyer to be eligible.
The majority of lenders will require the other borrowers to be close relatives of yours (usually parents) before they will accept you. However, the maximum term of the mortgage will be determined by the age of the oldest borrower, which could lead to higher monthly repayments if you’re borrowing with parents.
Which lenders offer Joint Borrower Sole Proprietor mortgages?
Major lenders who offer Joint Borrower Sole Proprietor mortgages include Barclays, Clydesdale Bank, Metro Bank, Skipton Building Society and Principality Building Society. Smaller, local lenders may also provide them.
Our whole-of-market mortgage advisers can help you find more lenders that do offer Joint Borrower Sole Proprietor mortgages and help you determine the best option for you. Call us on 020 8037 4027 to book an appointment with one of our mortgage advisers today.
Can the other borrowers live in the property with me?
Generally, only the person named on the deeds for the property can live there.
What else do I need to consider?
Being able to collectively pool together enough for the repayments does not necessarily mean you can afford the property – you need to factor in maintenance costs, insurance and utility bills before deciding on a property. Each lender will have different methods of assessing your income and affordability to decide whether you are eligible.
Furthermore, as much as you think you could never fall out with your family, disputes do happen which can leave everyone tied to the mortgage in a difficult situation. Removing names from the mortgage can be expensive, and if you can’t afford the repayments alone then you may be forced to sell the property.
It is also important to consider what may happen in the long term before committing to a joint borrower sole proprietor mortgage. Would your family be able to make repayments if illness or injury leave you unable to work for a while? What if your family need to be removed from the mortgage? It is impossible to predict the future, but you can put a plan in place in the event any problems arise.
How Starck Uberoi Wealth can help?
Whether you’re looking to purchase a home or want to help a loved one, Starck Uberoi Wealth can help you find a Joint Borrower Sole Proprietor mortgage that works for you. We will take the time to understand your wishes and requirements, and work from there to find a mortgage that fits you.
For more information, please see our mortgages page. To book an appointment with one of our mortgage advisers, call us on 020 8037 4027 or email us at info@suwealth.co.uk. Our office is located 10 minutes away from Brentford train station, and is on the 267 London bus route between Fulwell and Hammersmith.