5 Thing’s to know about Joint Borrower Sole Proprietor Mortgages…

This is an article on the Joint Borrower Sole Proprietor Mortgages By: Olivia Portman – Operations Assistant at Open Vision Finance.

5 Thing’s to know about Joint Borrower Sole Proprietor Mortgages…

A Joint Borrower Sole Proprietor Mortgage means an applicant with a lower salary can get support from a family member, partner or friend to jointly apply for a mortgage with them, without the additional member being registered as the legal owner of the property on the property title deeds.

1. How many applicants can be considered?

Typically, anywhere from two applicants up to four can be on the mortgage, with up to four incomes considered in some cases.

2. What term can the mortgage be taken over?

The maximum age at the end of a mortgage term can be as high as 80 with some lenders. Meaning that the mortgage can be spread over an affordable term for everyone involved. The mortgage is usually based on the eldest applicants age, so having access to the slightly increased ages can be helpful to ensure the mortgage payments remain affordable.

3.Is it only for residential products?

Joint borrower sole proprietor mortgages exist for both residential and buy-to-let mortgages.

4.Who is it helpful for?

This option is geared towards helping close family members either get onto the property ladder or move home. Parents can choose to act as the second applicant, using their income to maximise the mortgage lending and affordability. Therefore, family members or friends with higher salaries can be used to support lower incomes without co-owning a property itself.

5. What else?

The applicant that is supporting the purchase will not be named on the title deeds to the property and means that, as a non-legal owner, they won’t be able to be entitled to any gain in the property – be that via rental yield or property value.  Due to not being on the title deeds, in the purchase scenario if the second applicant (using income but not on title deeds) owns another property already, the additional stamp duty land tax that would usually become payable, is very often not applicable. This decision will be down to the acting Solicitor who will complete the land registration and stamp duty land tax return.

It is good to know that for such a bespoke mortgage, it is only dealt with by certain lenders. We would encourage speaking to one of our mortgage adviser’s prior to applying or doing online research as they work with a majority of different lenders and that is imperative for this kind of application, as the areas to be assessed can be complex, including the stringent affordability and criteria requirements.

If you have found this article interesting or would like to arrange an appointment with one of our experienced Brokers, please get in touch with us on 01823 444022 or by email to advice@openvisionfinance.com.