Why consider a Joint Borrower Sole Proprietor mortgage?

For many, the prospect of getting onto the property ladder feels like a distant dream. What can one do when the cost of properties is so high and average incomes don’t make it viable to purchase?  One possible solution is the option of taking out a Joint Borrower Sole Proprietor (JBSP) mortgage.

What is a Joint Borrower Sole Proprietor mortgage?

A Joint Borrower Sole Proprietor mortgage allows up to four people to purchase a property together, but just one person takes legal ownership. The income of everyone is considered and all borrowers have joint responsibility for the mortgage payments, meaning that the affordability of the application is enhanced. This shouldn’t be confused with a guarantor mortgage in which the additional borrower(s) only becomes responsible for the repayments if you can't make them. In both cases, the other borrower(s) has no legal claim to the property.

With a JBSP mortgage, once your income increases enough for you to be able to manage the mortgage alone, then you can remove the additional applicant(s) thereby removing their liability for payment of the mortgage.

Who might benefit?

Many first-time buyers will consider a JBSP mortgage to increase their borrowing potential. A typical example could be a primary school teacher earning £30k who needs a mortgage for £150k. On this income alone the maximum mortgage available is circa £120k. However, the applicant’s parent earns £80k and only has a small mortgage which means the surplus income could be used to increase the overall borrowing capacity and could help get to the £150k required.

We are also seeing an increasing trend for JBSP mortgages with retired individuals wanting to downsize or move closer to their children and grandchildren. For some older applicants their income is not enough to allow them to make the move on their own and children are now able to help their parents with affordability to allow them to make the move that they want in their later years. 

In summary, while the cost of properties might still seem out of reach, for some Joint Borrower Sole Proprietor is one possible option to consider in order to increase the amount that can be borrowed. Even though there will only be one legal owner of the property, all applicants should still seek independent legal advice before undertaking such an application.

Further information:

https://www.money.co.uk/mortgages/guides/joint-borrower-sole-proprietor-mortgages

https://www.unbiased.co.uk/discover/mortgages-property/buying-a-home/what-is-a-joint-borrower-sole-proprietor-mortgage

Joint Borrower Sole Proprietor | Accord Mortgages