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What is a Joint Borrower Sole Proprietor Mortgage?

Posted on Thursday 18th October, 2018

With first-time buyers still struggling to get onto the property ladder, many are joining forces with their partners, friends and family to combine two deposits and incomes.

Aimed at bridging the gap between salaries and property prices, and with the government’s 3% stamp duty surcharge on 2nd homes being introduced, Joint Borrower Sole Proprietor (JBSP) mortgages applications have begun to increase.

What is a JBSP mortgage?

It’s a mortgage that is being increasingly utilised by lenders that means an applicant with a lower salary can get support from someone, usually a family member (depending on lender), to apply for a mortgage,

The applicant that is supporting the purchase will not be named on the 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.

If, as can be the case, the relationship between the two parties breaks down, it could be difficult for the non-legal owner to have their name removed from the mortgage. And, as it’s a JBSP mortgage, it’s unlikely that the legal owner can afford the mortgage on their own, meaning that the non-legal owner could be faced with a lengthy and costly legal battle.

On the plus side, it means that the supported applicant will be able to get a foot on the property ladder when they may not have been previously able to.

With such a bespoke mortgage that is only dealt with by certain lenders, speaking to an adviser that works with many lenders is imperative for this sort of application.

For advice on getting a Joint Borrower Sole Proprietor mortgage, who will be able to help you with the next steps.

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