Joint Borrower Sole Proprietor Mortgage

What is a JBSP mortgage and how do they work?

A JBSP mortgage basically allows two or more people to buy a property together, but with only one taking ownership of the mortgage deeds.

This type of mortgage is useful when you have parents or family members who want to help someone buy a home, without owning the property themselves.

A JBSP mortgage is an alternative to a guarantor mortgage. With a JBSP mortgage, parents or family members are not required to provide savings or guarantees for a deposit. And, unlike a guarantor mortgage, the income of everyone on the mortgage is considered.

What criteria do you need to meet for a JBSP mortgage? Who is eligible for one of these?

The criteria are pretty similar to a standard mortgage. Your income and your expenditure are taken into account. A lender will have age limits in place to use the additional borrower’s income. This could affect the other borrower’s eligibility, due to the maximum term.

Do you pay stamp duty on a JBSP mortgage?

If the other borrower is a homeowner, they won’t be charged any second property stamp duty surcharges. Ultimately, though, this will also depend on the sole proprietor’s circumstances.

Can you have a sole mortgage on a joint property?

No. Lenders will not allow more people to be named on the deeds of a property than are party to the mortgage. It is due to the legalities of repossessing the property, in the worst case scenario where the mortgage repayments are not being met.

What’s the difference between a joint mortgage and a JBSP mortgage?

The main difference between a joint mortgage and a JBSP mortgage is that on a joint mortgage, all borrowers take ownership of the property. On a JBSP mortgage, only one of the borrowers will be the owner of the property.

What’s the difference between a guarantor mortgage and a JBSP mortgage?

On a JBSP mortgage, the parent or family member can contribute to the mortgage from the start, but with a guarantor mortgage, the guarantor would only become liable for the mortgage if the applicant is unable to make the payment.

There aren’t many guarantor mortgages available now, and lenders seem to be moving more towards the JBSP mortgage type. [podcast recorded in September 2024].

Can I get a JBSP mortgage with bad credit?

Potentially, yes, you can get a JBSP mortgage, but this could have some impact on lender choice. Ultimately, it will depend on what bad credit you have and if it fits criteria with lenders’ criteria.

How does remortgaging a Joint Borrower Sole Proprietor mortgage work?

It’s very similar to a standard remortgage. All applicants’ income and expenditure are assessed. The lender may also request the non-owner to receive independent legal advice again.

What are the pros and cons of a JBSP mortgage?

A JBSP allows you to get on or move up the property ladder with increased affordability, from having another borrower on the mortgage. You will have sole ownership of the property. If the other borrower is a homeowner, they won’t be liable for the second property stamp duty surcharge.

You aren’t restricted to buy in a certain type of property, which can be a factor in some government backed schemes. This type of mortgage can be used for a residential or Buy to Let property.

You’re able to remortgage when your circumstances change for the better, and the other borrower can then be released from the commitment. Essentially, you can use this type of mortgage as a temporary solution to get onto the property ladder.

The cons are that each borrower is jointly liable for the mortgage repayments. Whilst being financially committed, the other borrower won’t have ownership of the property or benefit from any financial gain.

If any mortgage repayments are late or missed, all parties’ credit ratings will be affected. In addition, the age limit set by the lender may affect the other borrower’s eligibility. Furthermore, the other borrower may have difficulty getting another mortgage or loan as they are financially obligated to the JBSP mortgage.

What else do we need to know? Anything else you’d like to add?

If you’re looking to go down the JBSP mortgage route, the support of a broker with experience in this type of mortgage could be invaluable. Get in touch with us and we can pass you onto a broker directly for a free, no obligation chat.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR PROPERTY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Is there a Joint Borrower Sole Proprietor mortgage age limit?

There isn’t an age limit as such, but you’re adding another borrower on to improve affordability. They would need to be young enough to both use their income and have a mortgage term long enough for the monthly mortgage repayments to be affordable.

With some lenders, you can go up to age 75 using earned income, and sometimes up to age 80 using retirement income.

What documentation is required for both the Joint Borrower and the Sole Proprietor in a JBSP application?

For a JBSP mortgage, you would typically need standard documents such as pay slips, bank statements and identification, but one thing is different. You will need an independent legal advice declaration, completed by a solicitor for the person not being named on the property deeds.

Are there restrictions on the types of properties that can be purchased with a JBSP mortgage?

As far as I’m aware, you can purchase any type of residential property on a JBSP mortgage. This is obviously subject to lender’s valuation and valuer’s discretion.

Can the Joint Borrower be added after the mortgage has already been taken out?

No, you couldn’t add a joint borrower to a JBSP mortgage after it’s taken out. You would have to remortgage the property onto a Joint Borrower Sole Proprietor scheme and add the additional borrower to the mortgage at that point. They would also have to obtain independent legal advice.

Can I get a JBSP mortgage with my parents? Can I get a JBSP mortgage with my children?

Can I get a JBSP mortgage with my siblings or friends?

Some lenders may be able to consider a JBSP with friends, but others will not. Typically, it needs to be a close family relation, but there may be lenders out there who could consider it.

How does having multiple joint borrowers affect a JBSP mortgage application? Are there limits on the number of joint borrowers in a JBSP mortgage?

Are there additional fees or costs associated with taking out a JBSP mortgage?

You’ve demonstrated how a mortgage broker can help. Have you got anything else you’d like to add?
A JBSP mortgage is quite bespoke and not the typical, vanilla case. This is where you can lean on your advisor for guidance on the pros and cons, to ensure this is the right mortgage for you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.