With more people than ever looking to buy their first property as soon as possible, it’s helpful to know what options are out there to help make this happen. One option that could be available is a ‘joint borrower, sole proprietor’ mortgage, so we’ve created a whistle stop guide to explain what this is and how it could help you.
What is a joint borrower, sole proprietor mortgage?
This is a mortgage where several people can be listed on the mortgage application, in some cases up to six applicants, known as the ‘joint borrowers’. Of the joint borrowers, only one or two will own and live in and legally own the property, known as the ‘sole proprietor’.
What are the benefits?
Having more applicants on the mortgage mean that there are more incomes taken into consideration for the mortgage loan, which can help improve affordability and the chances of buying the best property.
This type of mortgage could be a benefit for first time buyers who are in need of a short term solution to help them get on the property ladder. For example – if a young person at the start of their career wanted to get on the property ladder but had a lower income, their parents could be added on to the mortgage as joint borrowers to increase affordability for the mortgage loan. In a few years’ time, if the child’s circumstances have changed (e.g. they’ve progressed in their career and have a better salary), they could apply to remove the joint borrowers from the mortgage.
What else do I need to know?
Although the joint borrowers not residing in the property aren’t considered to be legal owners, they could still be liable to for the monthly mortgage payments in the event that they’re not made by the property owner / sole proprietor.
Gifted deposits are not accepted for a joint borrower, sole proprietor mortgage.
How can I find out if a joint borrower, sole proprietor mortgage is right for me?
Not every kind of mortgage will be suitable for everyone’s individual needs, so it’s important to seek advice to find out which is the best option for you. Aw well as being able to search from 1000s of mortgages with over 90 lenders, our mortgage advisers have expert knowledge to guide you through the process until you’re ready to move in.
To make an initial, no –obligation with an adviser, give us a call on 0115 9017146 or send us an e-mail.
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